University of Manitobaumanitoba.ca/faculties/management/ti/media/docs/Manitoba... · Introduction...

2008

Manitoba Transportation Report

Prepared For: Manitoba Infrastructure and Transportation

Transport Institute University of Manitoba

Manitoba Transportation 2008Report

Prepared For: Manitoba Infrastructure and Transportation

May 2008 Transport Institute, University of Manitoba

This report has been financially supported by the Manitoba Department of Transportation and Government Services. The views expressed do not necessarily represent those of the Department. The Department provides no warranties as to the validity of accuracy of the information presented herein.

Introduction

Transportation continues to challenge all business sectors today. Globalization and the consequent intended supply chains have increased the complexity of moving goods and establishing and maintaining infrastructure. Major initiatives on the Asia Pacific Gateway, Eastern Gateways, and a Transport Canada request for proposals on the Heartland (Ontario and Quebec) are currently in progress. It is essential that a vehicle exists to continually assess global developments impacting the transportation sector, and to apprise policy makers of the potential impacts that changes in the sector may have on the Manitoba economy. With the support of the Manitoba Infrastructure and Transportation, the University of Manitoba Transport Institute (UMTI) has developed a Report on Transportation. The target audience is the Minister of Infrastructure and Transportation, and executive officers in the department responsible for policy development. The Report identifies key transportation and trade trends in Manitoba, and assesses critical drivers affecting the economic development of transportation. Data presented in this report is the latest available Statistics Canada, Manitoba Bureau of Statistics and industry data that is available to our researchers.

Table of Contents

1.0 Transportation and Warehousing and the Regional Canadian Economy .................. 1 2.0 Economic Impact of Transportation in Manitoba ‐ $3.34 Billion in 2006.................. 17 3.0 The State of the Macro Economy...................................................................................... 30

Economic Indicators ................................................................................................... 32 Monetary and Energy Indicators................................................................................. 45

4.0 Market, Trade, and Transportation Trends .................................................................... 55 Markets ....................................................................................................................... 55

European Union................................................................................................. 57 Japan.................................................................................................................. 63 United Kingdom ................................................................................................. 67 United States ...................................................................................................... 72

Emerging Markets....................................................................................................... 77 Brazil.................................................................................................................. 79 China.................................................................................................................. 83 India ................................................................................................................... 87 Mexico................................................................................................................ 92 Russia ................................................................................................................. 96 South Korea ..................................................................................................... 100

International Trade.................................................................................................... 104 Import/Export Traffic by Mode ................................................................................ 108 Emerging Transportation Issues ............................................................................... 119

5.0 Trade .................................................................................................................................... 121 Methodology ............................................................................................................. 121 Manitoba’s Trade Content ........................................................................................ 123

Manitoba’s Exports.......................................................................................... 123 Manitoba’s Imports.......................................................................................... 128

Export Routing and Usage of Transportation Infrastructure .................................... 132 Usage of Manitoba’s Transportation Infrastructure.................................................. 138 Domestic Trade ......................................................................................................... 146

Rail Commodity Traffic Flows......................................................................... 146 Truck Commodity Traffic Flows ...................................................................... 153

Mid-Continent Corridor Trade.................................................................................. 159 6.0 Federal Revenues and Expenditures.............................................................................. 175

Federal Spending ...................................................................................................... 176 Federal Revenues ...................................................................................................... 177

7.0 Climate and the Environment ......................................................................................... 178 Hybrid Vehicles ........................................................................................................ 188

Glossary ......................................................................................................................... 190 List of Figures................................................................................................................ 194 List of Tables ................................................................................................................. 200

1.0 Transportation and Warehousing and the Regional Canadian Economy

Canada comprises the second largest national land mass on the globe, with likely the lowest population density among industrialized nations. This, coupled with our dependence on international trade, incorporates a significant spatial element to virtually all aspects of our economy. While Transportation and Warehousing is important to Canada as a whole, it is a more important part of the economy in the west than the east. Figure 1.1 shows per capita gross domestic product1 from Transportation and Warehousing in western Canada versus eastern Canada. Transportation and Warehousing on a per capita basis was $2,263 in western Canada in 2006, compared to $1,326 in eastern Canada, a difference of $937 per capita. This difference has grown from $699 in 2002. GDP related to transportation has been growing due to increased world trade, with longer supply chains, particularly to the Orient.

Figure 1.1: Per Capita Direct GDP from Transportation and Warehousing by Region2

$1,612$1,579$1,543$1,491 $1,495

$2,019$1,979

$2,122$2,194

$2,263

$1,326$1,311$1,291$1,268$1,280

$1,000

$1,500

$2,000

$2,500

2002 2003 2004 2005 2006

Canada Western Canada Eastern Canada

1 Gross domestic product figures are in 1997 dollars. 2 Western Canada is Manitoba, Saskatchewan, Alberta, British Columbia, Yukon Territory, Northwest Territories and Nunavut.

1

Figure 1.2 further highlights the growing relative importance of transportation and warehousing in western Canada relative to eastern Canada. The ratio of gross domestic product per capita from Transportation and Warehousing was 155% in 2002. It rose to 171% in 2006.

Figure 1.2: Ratio of Per Capita Contribution from Transportation and Warehousing to Direct GDP: Western Canada Compared to Eastern

171%167%

164%

155%

159%

140%

145%

150%

155%

160%

165%

170%

175%

180%

2002 2003 2004 2005 2006

The rate of increase in this ratio has been 2.5% per year since 2002. This indicates that Transportation and Warehousing is ever increasingly important in importance in western Canada relative to eastern Canada. Within western Canada, the importance of the Transportation and Warehousing sector varies by province. As shown in Figure 1.3, on a per capita basis the sector is most important in Alberta, and least important in Manitoba. In every western province the per capita GDP has grown over the last five years.

2

Figure 1.3: Per Capita Direct GDP from Transportation and Warehousing by Province Western Canada

$2,278$2,344

$2,441$2,515

$2,596

$1,997$2,066

$2,185$2,268

$2,336

$1,796

$1,818$1,931

$2,062$2,004

$1,882

$1,812$1,987

$1,808$1,924

$1,500

$2,000

$2,500

$3,000

2002 2003 2004 2005 2006

British Columbia Alberta Saskatchewan Manitoba

Figure 1.4:

Figure 1.4 shows the importance of Transportation and Warehousing as a percent of total provincial GDP by region in 2006 The lowest share of GDP related to Transportation and Warehousing in Western Canada in 2006 was 6.1% for Alberta. Comparatively the province with the highest share in eastern Canada, New Brunswick, was 5.4%. Other western provinces had shares of GDP that were more than 6%, while typical eastern provinces had shares in the 3% to 4% range.

Transportation and Warehousing Direct Contribution to GDP by Region: 2006

6.1%

7.3%

3.9% 4.3%

5.4%

4.4%

2.8%3.6% 3.3%

4.0%3.0%

4.8%

6.4%

4.1%

6.6% 6.8%

0.0%1.0%2.0%

3.0%4.0%5.0%6.0%7.0%

8.0%9.0%10.0%

BC AB SK MB ON QU

EN.B.

N.S.

P.E.I.

NFLD YU

KNWT

NUN

CDA

W CDA

E CDA

3

At 6.8%, Manitoba had the second highest proportion of GDP arising from Transportation and Warehousing in Canada in 2006. Only Saskatchewan was higher at 7.3%. The share of GDP from Transportation and Warehousing in Manitoba is 2.0% higher than the national average. Figure 1.5 shows the trend in share of GDP for each of the Western provinces. As a share of GDP, transportation and warehousing has been relatively stable in Manitoba and Alberta. It has been rising in Saskatchewan and British Columbia. A number of factors play into the greater importance of transportation in Western Canada, than Eastern Canada. First, economic growth has been higher in Western Canada than eastern Canada for the last number of years. Second, travel distances tend to be longer in western Canada than eastern Canada. Finally there has been a surge in imports and exports to the pacific rim countries which increases demand for western Canadian transportation and warehousing services. This has been a particularly important contributor in B.C. In Saskatchewan growth has been due the increased demand for raw commodities particularly potash.

Figure 1.5: Transportation and Warehousing Contribution to Direct GDP by Region: 2006

6.7% 6.7%6.8% 6.8% 6.8%

7.0% 7.0%7.1% 7.1%

7.3%

5.9% 6.0% 6.0% 6.1% 6.1%

6.6%6.5%

6.4%6.2%6.2%

5.0%

6.0%

7.0%

8.0%

2002 2003 2004 2005 2006Manitoba Saskatchewan Alberta British Columbia

4

Figure 1.6 shows employment in Transportation and Warehousing per thousand population.

Figure 1.6: Direct Employment in Transportation and Warehousing per 1,000 Population by Region

19.219.5 19.1 19.2 19.3

22.221.821.821.9 21.8

18.518.0 18.0 18.1 18.1

15

18

20

23

25

2002 2003 2004 2005 2006Canada Western Canada Eastern Canada

In western Canada, employment in Transportation and Warehousing has been consistently around 22 employees per 1000 persons since 2002. Comparatively employment in eastern Canada has decreased slightly to 18.1 employees per 1000 persons in 2006 from 18.5 employees per 1000 persons in 2002. Similar to the comparison based on GDP per capita, Transportation and Warehousing employment per capita has become increasingly important in western Canada relative to eastern Canada during the past 5 years. In 2002 the ratio was 118.1%. It increased to 122.6% in 2006 as shown in Figure 1.7

5

Figure 1.7: Ratio of Per Capita Direct Transportation and Warehousing Employment: Western Canada Compared to Eastern Canada

120.6%

118.1%

121.4% 121.0%

122.6%

110%

115%

120%

125%

130%

2002 2003 2004 2005 2006

Transportation and Warehousing employment per thousand persons is highest in Manitoba, followed by Alberta. British Columbia and Saskatchewan are similar. (Figure 1.8).

Figure 1.8: Direct Employment in Transportation and Warehousing per 1,000 Population by Province: Western Canada

20.5 20.0 19.920.520.0

23.4

22.4 22.6 22.9

23.420.620.320.8 20.720.5

25.225.724.7

25.7

24.0

15

18

20

23

25

28

30

2002 2003 2004 2005 2006British Columbia Alberta Saskatchewan Manitoba

6

Figure 1.9 shows the share of total employment from Transportation and Warehousing for each region. In western Canada 5.1% of jobs were in Transportation and Warehousing in 2006. This compares to 4.4% for eastern Canada and 4.6% nationally. In western Canada, the share of jobs related to Transportation and Warehousing was most important in Manitoba3 at 5.7 % followed by Saskatchewan and British Columbia at 5.0%.

Figure 1.9: Transportation and Warehousing Contribution to Direct Employment by Region: 2006

5.0%5.7%

4.3% 4.5%

5.6%

4.3%

3.4%

4.7%

5.9% 5.9%

4.6%5.1%

4.4%

10.9%

4.9%5.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

BC AB SK MB ON QU

EN.B.

N.S.P.E.I.

NFLD YU

KNWT

NUNCDA

W CDA

E CDA

3 While the ratio is higher in the Northwest Territories and the same in the Yukon, the size of the population and number of jobs is small.

7

Labour income attributable to Transportation and Warehousing per capita for Canada, western Canada and eastern Canada are shown in Figure 1.10.

Figure 1.10: Direct Labour Income from Transportation and Warehousing per Capita by Region: 2006

$1,250$1,283

$1,374$1,446

$1,517

$1,037$1,008

$1,093$1,127

$1,158

$903 $930$970 $987 $1,000

$700

$800

$900

$1,000

$1,100

$1,200

$1,300

$1,400

$1,500

$1,600

2002 2003 2004 2005 2006Canada Western Canada Eastern Canada

Per capita labour income has risen in western Canada, eastern Canada, and Nationwide over the last 5 years. Per capita labour income from Transportation and Warehousing in western Canada reached $1,517 per person in 2006. The annual growth rate per annum from 2002 was 5.0%. Comparatively per capita labour income was $1,000 in eastern Canada, with a growth rate of 2.5% per year since 2002. Figure 1.11 shows the ratio of per capita income from Transportation and Warehousing in western Canada relative to eastern Canada since 2001. The ratio was relatively steady in 2002 and 2003 at around 139%. In 2006 it rose to 151.6%. This indicates that in relative terms Transportation and Warehousing is becoming more important in western Canada than eastern Canada.

8

Figure 1.11: Ratio of Direct Per Capita Income Contribution from Transportation and Warehousing to GDP: Western Canada Compared to Eastern Canada

151.6%146.4%

141.6%138.5% 137.9%

100%

110%

120%

130%

140%

150%

160%

170%

180%

190%

200%

2002 2003 2004 2005 2006

Alberta has the highest per capita labour income from Transportation and Warehousing in western Canada as shown in Figure 1.12. This is followed by British Columbia. Saskatchewan has the lowest per capita labour income. Labour income per capita has grown in all four provinces.

Figure 1.12: Direct Labour Income from Transportation and Warehousing per Capita Province: Western Canada

$1,372

$1,560

$1,709

$1,805

$1,276 $1,282$1,335

$1,413$1,354$1,320

$1,091$1,043

$993 $987$902

$1,296$1,243

$1,381

$1,260$1,335

$800

$900

$1,000

$1,100

$1,200

$1,300

$1,400

$1,500

$1,600

$1,700

$1,800

$1,900

$2,000

2002 2003 2004 2005 2006British Columbia Alberta Saskatchewan Manitoba

9

Figure 1.13 shows the share of labour income due to Transportation and Warehousing for each region. Nationally 5.1 % of labour income was the result of Transportation and Warehousing. In western Canada the share was 6.3%, while in eastern Canada it was 4.6%. Manitoba at 7.3% was the highest amongst the western provinces.

Figure 1.13: Transportation and Warehousing Direct Contribution to Labour Income by Region: 2006

5.9%

7.3%

4.3%

5.1%5.6%

4.7%

2.8%

4.5% 4.3%4.7%

5.1%

6.3%

4.6%

6.6%

5.9%

7.9%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

BC AB SK MB ON QU

EN.B.

N.S.

P.E.I.

NFLD YU

KNWT

NUN

CDA

W CDA

E CDA

In 2006, Transportation and Warehousing was the fifth most important sector of the Manitoba economy, contributing $2.3 billion to GDP.4 As shown in Figure 1.14. It was more important than sectors such as retail trade, wholesale trade, agriculture and mining, construction, information and cultural industries. It was less important than finance and insurance, manufacturing and health and social assistance and public administration.

4 The GDP measured by Statistics Canada in the section is the direct contribution of Transportation and Warehousing and directly related sectors. It excludes indirect and induced effects discussed in Section 2.

10

Figure 1.14: Direct GDP of Sectors of the Manitoba Economy: 2006

$6.9

$4.0

$2.5 $2.4 $2.3 $2.3 $2.1$1.7 $1.8 $1.7

$1.3 $1.1 $0.9 $0.8 $0.7 $0.9 $0.6 $0.3

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Finance and Insurance

Manufacturing

Health Care and Social Assistance

Public Administration

Transportation and Warehousing

Retail Trade

Wholesale Trade

Educational Services

Construction

Agriculture, Foresty, Fishing and Hunting

Information and Cultural Industries

Utilities

Other Services ‐ except Public Administration

Professional, Scientific and Technical Services

Accomodation and Food Services

Mining and Oil and Gas Extraction

Administrative and Support, Waste Management and ...

Arts, Entertainment and Recreation

$ billions

In terms of total GDP contribution in Manitoba, Transportation and Warehousing has been growing. In 2002 the GDP contribution was $2.1 billion. This has increased steadily reaching $2.3 billion in 2006 as shown in Figure 1.15. Growth over the time period was 2.3% per year.

Figure 1.15: Direct GDP Level Transportation and Warehousing: Manitoba

2.1 2.12.2 2.3

2.3

1.0

1.5

2.0

2.5

3.0

2002 2003 2004 2005 2006

$ billions

11

As shown in Figure 1.16, Transportation and Warehousing was 6.83% of the total Manitoba economy in 2006. This was unchanged from 2005.

Figure 1.16: Trend in Share of Manitoba Direct GDP from Transportation and Warehousing

6.74%6.67%

6.84% 6.83% 6.83%

6.0%

6.2%

6.4%

6.6%

6.8%

7.0%

2002 2003 2004 2005 2006

Figure 1.17 shows paid employment by sector for Manitoba in 2006. In terms of paid employment, Transportation and Warehousing is the eighth largest sector of the Manitoba economy, following such sectors as manufacturing, retail trade and public administration. It is larger than sectors such as wholesale trade, construction and information and cultural services5.

5 Agriculture is not included in the count of paid employees in the Statistics Canada data.

12

Figure 1.17: Direct Paid Employment by Sector of the Manitoba Economy: 2006

000 Paid Employees 66.0

63.560.9

45.843.7

37.0

29.124.7

22.8

15.712.3

6.7 6.22.5

22.518.7

35.8

0

10

20

30

40

50

60

70


Retail Trade

Manufacturing






Administrative and Support Services

Construction

Wholesale Trade

Other Services

Professional Services


Utilities


Mining, Oil, Gas

000 Paid employees

Figure 1.18 shows the trend in Transportation and Warehousing paid employment. Manitoba. According to Statistics Canada paid employment data, employment in the Transportation and Warehousing sector was relatively steady at around 30,000 employees from 2002 to 2004. In 2005 there was a decline to 28,200 employees. This has reversed with employment increasing to 29,100 in 2006.

13

Figure 1.18: Trend in Transportation and Warehousing’s Direct Total Employment

29.7 29.9 29.6

28.229.1

25

26

27

28

29

30

31

32

33

34

35

2002 2003 2004 2005 2006

000 Paid employees

As a percent of total paid employment, Transportation and Warehousing’s share fell to 5.6% in 2005 and increased to 5.8% which is nearer the longer term range in 2006.. This corresponds to a period of consolidation in the warehousing industry. As can been seen later in this report, generally employment in transportation, itself, has been growing steadily.

Figure 1.19: Trend in Share of Manitoba Direct Paid Employment From Transportation and Warehousing

5.9% 6.0% 6.0%

5.6%5.8%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

2002 2003 2004 2005 2006

14

Figure 1.20 shows the ranking of total labour income in Manitoba by sector.

Figure 1.20: Direct Total Labour Income by Sector of the Manitoba Economy: 2006

$3.0$2.6

$2.2

$2.0$1.9

$1.7$1.6

$1.2 $1.1$1.0

$0.8$0.7

$0.6 $0.6$0.4 $0.4

$0.3 $0.2

0.0

1.0

2.0

3.0

Manufacturing





Retail Trade


Wholesale Trade

Construction

Other Services

Professional Services



Administrative and Support Services

Utilities

Agriculture, Fishing, Forestry


Mining, Oil, Gas

$ billions

Figure 1.21 shows that labour income from Transportation and Warehousing has grown in the last five years from $1.44 billion to $1.63 billion.

Figure 1.21: Direct Labour Income Level Transportation and Warehousing: Manitoba

$1.44 $1.47$1.52

$1.57$1.63

1.00

1.10

1.20

1.30

1.40

1.50

1.60

1.70

1.80

1.90

2.00

2002 2003 2004 2005 2006

$ billions

15

In spite of this growth, as a share of total labour income in Manitoba, Transportation and Warehousing has declined steadily from 7.7% in 2002 to 7.3% in 2006 as shown in Figure 1.22.

Figure 1.22: Trend in Share of Manitoba Labour Income From Transportation and Warehousing

7.7%7.5% 7.4% 7.3% 7.3%

5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

9.5%

10.0%

2002 2003 2004 2005 2006

16

2.0 Economic Impact of Transportation in Manitoba6 ‐ $3.34 Billion in 20067

The previous section of this report provides an overview of the importance of Manitoba’s Transportation and Warehousing8 sector in terms of direct contribution to GDP, labour income, and employment. However, the activities of one sector are intertwined with those of other sectors in an economy such that the economic impact is magnified or multiplied throughout the overall economy. Measurement of such effects is undertaken through economic impact models which attempt to quantify the intersectoral relationships. There are numerous designs of such models, which vary primarily in the scope of the “net” which defines the direct impacts of the sector under investigation. For this study of transportation in Manitoba, the definition applied is the commercial carriage of goods and people. This definition is advantageous to producing sound measures of the impact. It limits criticism of overstatement of the effects by limiting the sectors considered to those directly performing commercial transportation. It excludes allied sectors such as service industries (example hotels), repair shops, or equipment manufacturers. When included these allied sectors open the measured economic impact to criticism since the multiplicative effects of activities from the direct industry include the impacts on these allied sectors. Overall this restrictive definition of the sector mutes the criticism of double counting. The total economic impact of transportation is defined as the sum of direct economic activity, indirect economic activity and induced economic activity. Direct economic activity is measured by the economic drivers of employment, employment income, and expenditures and contribution to provincial gross domestic product for the transportation sector. Indirect activities are those that occur in firms that supply inputs to the direct sector. Induced effects are the trickle down affects of the expenditures by both the direct and related indirect sector as they multiply through other sectors of the economy. These are largely driven by consumption spending. The indirect and induced effects are a measure of the leverage derived from the direct effect. The higher the amount of leverage the greater the additional economic activity spawned from the original source. The total economic impact of the sector can be measured when the direct and the leverage effects are combined. In 2007 the Manitoba Bureau of Statistics revised their multipliers. This makes the results of this section non comparable to previous reports.

6 Annual data updates along with changes in multipliers, may yield results that are not comparable between annual reports. 7 The dollar related information in this section is in current dollars. 8 The Statistics Canada macroeconomic industry data for GDP and labour for Canada, and provincially, consolidates Transportation and Warehousing. In terms of the remainder of this economic analysis section the focus is on transportation specifically.

17

The robustness of economic impact results is dependent on the quality of information acquired about the direct sector, and the quality of the input output matrix used to derive the indirect and direct effects. Manitoba is a relatively small economy with few firms in many sectors. The consequence is general weakness of direct and input output data. Two approaches are available to acquire data for the direct sector. Data can be acquired from third party data providers or the sector can be directly surveyed. In both cases, estimates of the economic drivers are developed of the entire population from the survey. This analysis uses data acquired from third party data providers, principally Statistics Canada. This approach reduces costs, allows the creation of historical results and assures greater consistency of that historical information. The modes included in the analysis are: • • • • •

For Hire Trucking Rail Aviation Couriers and Local Messengers,9 and Urban and Interurban Bus

Data was not available for water carriers or for pipelines. Information for the taxi sector was available however has been excluded from this report, as policy setting for this mode is the purview of the Taxicab Board. The multipliers used in this analysis were calculated by the Manitoba Bureau of Statistics. Figure 2.1 shows the growth in total GDP for Manitoba that is derived solely from transportation activities. Total GDP measured on this basis rose from $2.72 billion in 2002 to $3.34 billion is 2006 ‐ a slight increase from the current estimate of $3.33 billion in 2005. Over the entire period, however, the nominal growth rate was 5.2% per year.

9 Couriers and local messengers include the major international courier companies such as FedEx.

18

Figure 2.1: Trend in Total GDP by the Transportation in Sector in Manitoba

($ Billion)

2.722.90 3.00

3.29 3.24

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

2002 2003 2004 2005 2006

This total includes the leverage (multiplier) effect of direct activity in transportation on other sectors. Figure 2.2 shows economic impact of the total Manitoba transportation GDP as a ratio of direct, indirect, and induced effects.

19

Figure 2.2: Trend in Total GDP by Leverage (Multiplier) Component Generated by the Transportation in Manitoba

($ Billion) $1.00 Direct GDP = $1.83 Total GDP

Leverage Factor = .83

1.44 1.56 1.61 1.81 1.83

0.57 0.60 0.620.67 0.66

0.75 0.770.85 0.85

0.71

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

2002 2003 2004 2005 2006

Direct Indirect Induced

2.722.91 3.00

3.33 3.34

Overall, one dollar of GDP from direct transportation activities results in an additional $.83 generated through activities in other sectors. Since 2002, total employment attributable to transportation in Manitoba10 has grown by about 1.2% per year from 47,810 to 50,220 (Figure 2.3).

10 Statistics Canada made significant adjustments to employment to the 2003 employment data for couriers in 2005.

20

Figure 2.3: Trend in Total Employment Generated by the Transportation Sector in Manitoba

47,810 47,36049,245

52,47550,220

0

10,000

20,000

30,000

40,000

50,000

60,000

2002 2003 2004 2005 2006

The level of employment in trucking was a major influence on this trend as shown in Figure 2.4 and Figure 2.5 accounting for more than one half of all jobs. The number of jobs related to trucking declined slightly in 2006. This related to the tighter market as fuel prices and the Canadian dollar increased.

Figure 2.4: Trend in Total Employment Generated By Trucking In Manitoba

21,970 21,69524,590

29,090 28,570

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2002 2003 2004 2005 2006

21

Figure 2.5: Trend in Total Employment Generated by Aviation, Couriers, Rail and Bus in Manitoba

3,6754,205

3,735 3,410 3,170

6,765

6,505

6,9708,280

8,780 8,835

7,6007,1607,370

7,310

6,0155,315 5,660

5,405 5,210

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2002 2003 2004 2005 2006

Aviation Couriers Rail Bus

As shown in Figure 2.5 other sectors have generally declined in employment since 2002. Aviation related jobs decreased by 2,275, while bus related jobs declined by 805. Rail and couriers related jobs declined by 605 and 505, respectively. Figure 2.6 shows the total employment by year broken down between direct, indirect, and induced effects. For each direct job in transportation an additional .99 jobs are created.

22

Figure 2.6: Trend in Employment by Leverage (Multiplier) Component Generated by the Transportation Sector in Manitoba

Number of Employees 1 Direct Job = 1.99 Total Jobs


24,460 24,280 25,310 26,955 25,760

9,965 9,890 10,215 10,640 10,165

13,385 13,190 13,90014,880

14,295

5,000

10,00015,000

20,00025,00030,000

35,00040,000

45,00050,000

55,000

2002 2003 2004 2005 2006

Direct Indirect Induced

47,810 47,365 49,24552,095

51,355

Total labour income in Manitoba due to the transportation sector rose from $1.62 billion in 2002 to $1.73 billion in 2006 (Figure 2.7). The growth rate was 1.7% per year. Income fell in 2006 due to the decline in the number of jobs.

Figure 2.7: Trend in Total Labour Income Generated by the Transportation Sector in Manitoba

($ Billion)

1.62 1.63 1.671.78 1.73

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

$1.80

$2.00

2002 2003 2004 2005 2006

23

For each dollar of direct labour income in transportation an additional $.66 in labour income is created in the Manitoba economy. Figure 2.8 shows the components of labour income since 2002.

Figure 2.8: Trend in Labour Income by Leverage (Multiplier) Component Generated by the Transportation Sector in Manitoba

($ Billion) $1 Direct Labour Income = $1.66 Total Labour Income


0.96 0.97 1.00 1.08 1.04

0.32 0.32 0.320.33 0.32

0.34 0.34 0.350.38

0.36

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

$1.80

$2.00

2002 2003 2004 2005 2006Direct Indirect Induced

1.63 1.671.78

1.731.62

24

Amongst the modes, trucking is the most important transportation sector in Manitoba, contributing $1.47 billion to GDP in 2006 as shown in Figure 2.9. This is followed by rail and aviation. Couriers and bus are similar in size.

Figure 2.9: Total GDP Generated by Transportation Mode: 2006

($ Billion)

Trucking, $1.47

Couriers, $0.19

Aviation, $0.57

Bus, $0.20

Rail, $0.91

As shown in Figure 2.10 each mode’s contribution to GDP has since 2002.

Figure 2.10: Change in Total Contribution to Manitoba GDP by Transportation Mode

($ Billion)

$0.66

$0.18

$0.93

$0.77

$0.18

$0.63

$0.20

$1.11

$0.79

$0.18

$0.64

$0.21

$1.15

$0.81

$0.19

$0.65

$0.20

$1.33

$0.95

$0.20

$0.57

$0.19

$1.47

$0.91

$0.20

$0.00$0.10$0.20$0.30$0.40$0.50$0.60$0.70$0.80$0.90$1.00$1.10$1.20$1.30$1.40$1.50

Aviation Couriers Trucking Rail Bus2002 2003 2004 2005 2006

25

Trucking and rail have grown in importance while aviation has declined. The largest growth was in trucking with the contribution to GDP rising by $.54 billion over the time period. Rail grew by $.14 billion, while aviation fell by $.9 billion. Couriers and bus changed only slightly. Figure 2.11 shows the comparative leverage of each of the modes in terms of contribution to GDP. Per dollar of GDP generated directly, bus generates the highest level of leverage throughout the economy at 1.58, followed by couriers and aviation at 1.01 and .85 respectively. Trucking and rail had similar leverage effects.

Figure 2.11: Leverage (Multiplier) Ratios for Manitoba Total GDP by Transportation Mode

1.01

0.680.69

0.85

1.58

0.000.100.200.300.400.500.600.700.800.901.001.101.201.301.401.501.60

Bus Couriers Aviation Trucking Rail

26

As presented in Figure 2.12 total employment created by trucking is more than all the other sectors combined.

Figure 2.12: Total Employment Generated by Transportation Mode: 2006

Aviation, 6,505 Trucking, 29,705

Rail, 6,765

Bus, 5,210

Couriers, 3,170

Employment changes between 2002 and 2006 are shown in Figure 2.13. As of the end of 2006, employment related to trucking had increased from 21,970 to 28,570. Aviation declined from 8,780 to 6,505. Rail declined from 7,370 to 6,795. Bus decreased from 6,015 to 5,210. Couriers decreased from 3,675 to 3,170.

Figure 2.13: Change in Total Employment Generated by Transportation Mode

8,780

3,675

21,970

7,370

6,0158,835

4,205

21,695

7,310

5,3158,280

3,735

24,590

7,160

5,660

6,970

3,410

29,090

7,600

5,405

6,505

3,170

28,570

6,765

5,210

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Aviation Couriers Trucking Rail Bus

2002 2003 2004 2005 2006

27

With respect to leverage in creating jobs throughout the economy, as shown in Figure 2.14, each aviation direct job generates an additional 1.42 jobs. This is followed by trucking at 1.00 bus at .89, then rail and couriers.

Figure 2.14: Leverage (Multiplier) Ratios for Manitoba Employment by Transportation Mode

1.42

1.000.89

0.670.61

0.000.100.200.300.400.500.600.700.800.901.001.101.201.301.401.50

Aviation Trucking Bus Rail Couriers

When labour income is considered, trucking is also the largest modal contributor to the economy. As shown in Figure 2.15, the trucking industry overall produced $.71 billion in labour income in 2006. This was followed by rail at $.49 billion, aviation at $.25 billion, bus at $.17 billion and couriers at $.10 billion.

Figure 2.15: Total Labour Income Generated by Transportation Mode: 2006

($ Billion)

Aviation, $0.25

Couriers, $0.10

Bus, $0.17

Rail, $0.49

Trucking, $0.71

28

Growth in labour income from 2002 to 2006 is shown in Figure 2.16. Labour income from trucking increased from $.46 billion to $.71 billion. Aviation decreased from $.41 billion to $.25 billion. Rail grew slightly to $.49 billion. Couriers and bus were unchanged.

Figure 2.16: Change in Total Labour Income Generated by Transportation Mode

($ Billion)

$0.41

$0.10

$0.46

$0.47

$0.17

$0.39

$0.10

$0.50

$0.48

$0.16

$0.35

$0.11

$0.58

$0.47

$0.16

$0.29

$0.10

$0.69

$0.54

$0.17$0.25

$0.10

$0.71

$0.49

$0.17

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

Aviation Couriers Trucking Rail Bus

2002 2003 2004 2005 2006

Figure 2.17 provides the leverage ratios for labour income by mode. Aviation provides the greatest leverage with $.97 of additional labour income through the economy for every dollar of direct labour income in aviation. This is followed by couriers, rail and trucking. Bus provides lower levels of labour income leverage.

Figure 2.17: Leverage (Multiplier) Ratios for Manitoba Labour Income by Transportation Mode

0.97

0.690.64 0.62

0.45

0.000.100.200.300.400.500.600.700.800.901.001.101.201.301.401.50

Aviation Couriers Rail Trucking Bus

29

3.0 The State of the Macro Economy

After several years of substantial growth, the world economy is now facing challenges in maintaining its current pace of development. While growth still remains strong in developing markets such as China and India, the weakened US economy has begun to exert some drag on the global economy. Global economic growth is still moving forward, just not at the breakneck pace seen in recent years. In the UN report entitled “World Economic Situation and Prospects 2008” several threats to the sustainability of global economic growth are identified: • End of the housing bubble in the US • Unfolding credit crisis in the US • Decline of the American dollar vis‐à‐vis other major currencies • Persistence of large global imbalances • High oil prices Most of the threats to the global economy involve the condition of the US economy which demonstrates the impact the American economy has on the world. An outright recession in the US would further slow global growth, however most analysts are projecting the US economy to rebound in 2009. The Canadian economy has slowed somewhat, primarily reflecting the deceleration in growth of the American economy. With the two economies so closely tied together, a decline in the United States one will be reflected in Canada. However, Canada’s economy is well positioned to withstand the slowing growth of the US economy. Strong domestic demand, supported by sturdy employment growth and gains in real income owing partly to rising world demand for and prices of commodities have placed the Canadian economy in a strong position11. The Canadian financial system is sound and is likely to remain so for the foreseeable future12.

11 Bank of Canada: Financial System Review 2007 (2007) 12 Bank of Canada: Financial System Review 2007 (2007)

30

The Bank of Canada’s “Monetary Policy Report” and the International Monetary Fund’s (IMF) “World Economic Outlook” identify the following as risks to the outlook of the Canadian economy: • A weaker than expected US economy • A sharper adjustment in the US housing sector • A sharp decline in commodity prices • Renewed appreciation of the Canadian dollar • Stronger household demand The Bank of Canada’s Financial System Review maintains that the financial positions of the Canadian financial, non‐financial corporate, and household sectors remain solid, supported by favourable macroeconomic conditions. It also maintains that the Canadian financial system appears well placed to withstand the impact of potential shocks as listed above. Scotia Capital has identified three trends which continue to dominate Canada’s underlying performance: • The pace of the economic activity remains two to three times greater in the resource

rich regions in the west, north and east. Export sensitive manufacturing oriented provinces in central Canada remain constrained, not only by the US slowdown, but by the loss of competitiveness associated with increased foreign competition and an even stronger Canadian dollar.

• In all provinces, domestic led activity remains fairly robust, led by consumer spending, non residential construction and services. Even in Ontario, where average output growth this year and next of 1.9% will lag the national average for a fourth consecutive year, final domestic demand is expected to advance at close to a 3% rate.

• Infrastructure spending will remain a key driver of domestic growth across all provinces. Besides the much needed outlays in health and education, there is a renewed push to upgrade transportation networks and ports, in addition to new green initiatives.

Infrastructure spending will be a key driver of economic growth in Manitoba in particular. Many major capital projects have just been completed, are currently underway or are in the planning stages. Among the more prominent projects currently underway: the $1.3 billion Wuskwatim Generating Station, the $580 million renovation and expansion of Winnipeg International Airport, the $660 million Red River Floodway expansion, and the $66 million development of a new nickel mine at Bucko Lake. Many other capital intensive projects are currently in the planning stages including most notably the $5 billion Conawapa Generating Station in northern Manitoba. This proposed hydro‐electric station will be Manitoba’s largest hydro project and will create about 13,000 person years of direct and indirect employment over its 8 year construction period.

31

Manitoba continues to maintain a diverse and stable economy which allows it to lessen the impact of downturns in certain sectors. The unemployment rate in Manitoba continues to remain among the lowest in the country, while strong performances in construction, agriculture and mining were mainly responsible for the improvement in Manitoba’s economy. Manitoba’s economic outlook continues to remain positive and is expected to be characterized by continued strong growth in residential and non residential construction, robust mining and exploration, a rebound in agricultural prices, increased electricity sales and modest growth in consumer spending13. With these points in mind, this section explores a number of key macro economic indicators that have a direct effect on the cost of, and flow of, transportation services. Like other critical business sectors, developments in the various transportation industries are intimately tied to the demands and performance of the economy, provincially, nationally, and globally. Monetary, productivity, and spending related indicators reveal much about the state of the economy, and in turn, provide a vehicle for understanding developments and bottlenecks across the transportation sector. The climate of the macro economy must be taken into account when considering and efficiently responding to challenges in the transportation industry.

Economic Indicators

The economic performance indicators listed in this section capture a set of trends in the economies of Canada and Manitoba between 2002 and 2006. Together, the indicators provide a context for understanding why and when developments in the transportation sector have occurred.

13 The information on the Manitoba economy is taken from the report, Manitoba Finance: Budget Paper A. The Economy (2007)

32

Figure 3.1 and Figure 3.2 show the real GDP totals (in millions of dollars) and rates of change in GDP for Canada and Manitoba.

Figure 3.1: Gross Domestic Product (Canada/Manitoba)

$000,000

$1,152,905 $1,174,592$1,210,656 $1,247,780

$1,282,204

$33,629 $34,074 $34,937 $35,872 $37,052

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

2002 2003 2004 2005 2006

$000,000

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$000,000

Canada Manitoba

From 2002 to 2006, Canada’s GDP increased from just over $1.15 trillion to more than $1.28 trillion. The annual average rate of growth was 2.9% over the same time period, Manitoba’s GDP increased from more than $33.6 billion to over $37.0 billion. The annual average rate of growth was 2.5%.

33

Figure 3.2 shows annual changes in the GDP growth rate. The national level of growth has remained relatively consistent and positive while the provincial growth has seen a steady overall increase from 2003 to 2006.

Figure 3.2: Rate of Change in GDP (Canada/Manitoba)

2.9%

1.9%

3.1% 3.1%

1.6%1.3%

2.5%2.7%

2.8%

3.3%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

2002 2003 2004 2005 2006

% change

Canada Manitoba

Canadian real GDP growth has seen a slight decline from 2005 to 2006. The Canadian economy is expected to maintain steady growth of between 2‐3%14. Weaker US demand, the appreciation of the Canadian dollar and a cooling of the Canadian and American housing markets (more notably in the US) have contributed to the deceleration of GDP growth15. Canada’s export sector, particularly automobiles and forestry products, which comprise approximately 25% of Canadian exports, will continue to exert a drag on export growth.

14 Department of Finance: Budget 2007 – Economic Developments and Prospects (2007) 15 Department of Finance: Budget 2007 – Economic Developments and Prospects (2007)

34

Figure 3.3 shows labour income (in millions of dollars) for Canada and Manitoba between 2002 and 2006.

Figure 3.3: Labour Income (Canada/Manitoba)

$000,000

$142,119 $146,441 $153,143$162,852

$171,126

$18,626 $19,421 $20,450 $21,379 $22,384

$0

$25,000

$50,000

$75,000

$100,000

$125,000

$150,000

$175,000

$200,000

2002 2003 2004 2005 2006

$000,000

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$000,000

Canada Manitoba

Between 2002 and 2006, Canada’s labour income increased from $142.1 billion to over $171.1 billion, an average annual growth rate of 4.8% per year. In that same time period, Manitoba’s labour income increased from $18.6 billion to over $22.3 billion. The average growth rate in Manitoba was 4.7% per year.

35

Figure 3.4 shows the rate of change in labour income for Canada and Manitoba between 2002 and 2006.

Figure 3.4: Rate of Change in Labour Income (Canada/Manitoba)

1.4%

3.0%

4.6%

5.1%

6.3%

4.7%4.5%

5.3%

4.3%

5.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

2002 2003 2004 2005 2006

% change

Canada Manitoba

While Manitoba has maintained a steady rate of change in labour income, Canada’s rate of change in labour income has seen a substantial increase from 2002 to 2005 with a slight drop in 2006. Figures 3.5 to 3.8 reflect changes in market prices (consumer price index – CPI) and personal spending in the Canadian and Manitoban economies.

36

Figure 3.5 shows the consumer price indices for Canada and Manitoba. As a measure of prices of a basket of consumer goods, the CPI is often referred to as an indicator of price changes (inflation/deflation) in the economy.

Figure 3.5: Consumer Price Index (Canada/Manitoba)

119122.3

124.6127.3

129.9123.1125.3

127.8131.2

133.7

100

110

120

130

140

2002 2003 2004 2005 2006

Index Points

Canada Manitoba

Between 2002 and 2006, the CPI for the Canadian economy increased from 119 to 129.9. The CPI for Manitoba also increased in the same time period from 123.1 in 2002 to 133.7 in 2006. At both the national and provincial levels this represents a gradual, stable increase of prices in the 2% annual range.

37

Figure 3.6 shows the rate of inflation in Canada and Manitoba between 2002 and 2006.

Figure 3.6: Rate of Change in CPI (Canada/Manitoba)

2.0%2.2%

1.9%

2.8%

2.2%

1.8%1.6%

1.9%

2.7%

2.0%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

2002 2003 2004 2005 2006

% change

Canada Manitoba

Between 2002 and 2006, Canada’s CPI averaged growth of 2.2%. During the same period, Manitoba’s CPI averaged growth of 2.0%. For Manitoba, inflation was 2.7% in 2005 – greater than the previous three years, this decreased in 2006 to 1.9% reflecting more moderate growth in energy prices compared to the previous two years16. Core CPI inflation is expected to remain close to 2.0% for the immediate future17.

16 Manitoba Finance: Budget Paper A. The Economy (2007) 17 International Monetary Fund: World Economic Outlook (2007)

38

Figure 3.7 displays the changing value of personal expenditures18 in the Canadian and Manitoban economies.

Figure 3.7: Personal Expenditures (Canada/Manitoba)

$000,000

$655,722 $675,443 $698,138 $724,942 $755,204

$20,570 $20,952 $21,660 $22,346 $23,083

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

2002 2003 2004 2005 2006

$000,000

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$000,000

Canada Manitoba

Canada’s personal expenditures increased to over $755 billion in 2006, up from $655 billion in 2002. The average annual growth rate was 3.6%. Manitoba’s personal expenditures increased from over $20.5 billion in 2002 to about $23.1 billion in 2006; an annual average growth rate of 2.9%.

18 The portion of GDP that is contributed by the consumption of consumer goods and services. These goods and services are meant to reflect household expenditures.

39

Figure 3.8 shows the trends in personal expenditures for Canada and Manitoba between 2002 and 2006. Despite year to year fluctuations, both Canada and Manitoba show ongoing growth in personal expenditures.

Figure 3.8: Rate of Change in Personal Expenditures (Canada/Manitoba)

3.6%

3.0%3.4%

3.8%4.2%

2.9%

1.9%

3.4%3.2% 3.3%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

2002 2003 2004 2005 2006

% change

Canada Manitoba

A strong job market has been responsible for solid consumer spending over the past five years and there is a continued shortage in the labour market19. Canada showed a steady overall increase in personal expenditure growth from 2003 to 2006, ending 2006 at 4.2%. Manitoba also showed an increase in growth, but has remained fairly level from 2004 to 2006. Consumer spending is expected to remain well supported by declines in interest rates and personal income taxes, as well as the 1% drop in the GST20.

19 TD Economics: TD Quarterly Economic Forecast (2007) 20 BMO Capital Markets: North American Outlook (2007)

40

Figure 3.9 displays the number of housing starts in Canada and Manitoba between 2002 and 2006. The housing sector leads the Canadian and Manitoban economies.

Figure 3.9: Housing Starts (Canada/Manitoba)

000’s

821.7877.8

930.7 896.3 914

14.416.6 17.5

18.820.1

0

200

400

600

800

1000

2002 2003 2004 2005 2006

000ʹs

0

5

10

15

20

25

000ʹs

Canada Manitoba

In Canada, annual growth was 2.7% with the number of housing starts increased from more than 821,000 in 2002 to more than 914,000 in 2006. In 2005, Canada experienced a decline in housing starts for the first time in the five year period, however it rebounded in 2006 with a gain of almost 18,000 housing starts. In Manitoba, the number of housing starts saw a steady increase. Between 2002 and 2006, housing starts increased from 14,400 to 20,100, an annual growth rate of 8.7%. The percent change in housing starts reveals information about consumption patterns and is directly related to other key indicators such as labour income and interest rates. It is also closely affiliated with the performance of critical economic industries such as forestry, manufacturing, and transportation.

41

Figure 3.10 shows the rate of change in housing starts in Canada and Manitoba between 2002 and 2006.

Figure 3.10: Rate of Change in Housing Starts (Canada/Manitoba)

2.0%

‐3.7%

6.0%

6.8%

25.9%

6.9%7.4%

5.4%

15.3%22.0%

‐10.0%

0.0%

10.0%

20.0%

30.0%

2002 2003 2004 2005 2006

% change

Canada Manitoba

Growth in Canada’s housing starts declined in terms of growth rate following a high of 25.9% in 2002. Faced with a negative growth rate in housing starts of ‐3.7% in 2005, the Canadian housing sector rebounded slightly to post a growth rate of 2.0% in 2006. In Manitoba, the number of housing starts continues to grow at a solid pace, however slightly down from the elevated pace of 22% in 2002. From 2004 to 2006, Manitoba’s rate of housing starts has averaged 6.8%. Residential construction is expected to soften as demand for new homes weakens in the face of declining affordability and the ebbing of pent up demand21. Canada Mortgage and Housing Corporation (CMHC) is projecting a decline in housing starts of 3.1% for Manitoba and a 6.7% drop in national housing starts for 200822.

21 BMO Capital Markets: North American Outlook (2007) 22 Manitoba Finance: Budget Paper A. The Economy (2007)

42

Figure 3.11 shows the unemployment rate in Canada and Manitoba between 2002 and 2006.

Figure 3.11: Unemployment Rate (Canada/Manitoba)

7.6 7.67.2

6.86.3

5.1 5 5.34.8

4.3

0.0

2.0

4.0

6.0

8.0

10.0

2002 2003 2004 2005 2006

% of labour force

Canada Manitoba

In Canada, the unemployment rate dropped by an annual average of 0.3% between 2002 and 2006. Overall, the decline was 1.3% to 6.3% in 2006. In Manitoba, the unemployment rate also experienced a decline. Between 2002 and 2006 the unemployment rate in Manitoba fell from 5.1% to 4.3%, an annual average decline of 0.2%.

43

Figure 3.12 displays the change in the unemployment rate in Canada and Manitoba between 2002 and 2006. A negative number indicates a decrease in the unemployment rate, resulting from an increase in employment.

Figure 3.12: Change in Unemployment Rate (Canada/Manitoba)

0.4

0

‐0.4 ‐0.4‐0.5

0‐0.1

‐0.5 ‐0.5

0.3

‐1

‐0.5

0

0.5

1

2002 2003 2004 2005 2006

% of labour force

Canada Manitoba

Canada has experienced a declining unemployment rate since 2004, decreasing by ‐0.4 in both 2004 and 2005 and by ‐0.5 in 2006. Manitoba experienced a substantial decrease in the unemployment rate in 2005 of ‐0.5. This was followed in 2006 with another decrease of ‐0.5. This is a sharp contrast to 2004 where the unemployment rate in Manitoba grew by 0.3. Private sector forecasters expect the labour market to remain healthy, averaging 6.4% in 200823. Manitoba had the lowest or second lowest unemployment rate in Canada since 1998, and is expected to remain among the lowest in the country24.

23 Department of Finance: Budget 2007 – Economic Developments and Prospects (2007) 24 Manitoba Finance: Budget Paper A. The Economy (2007)

44

Monetary and Energy Indicators

The appreciation of the Canadian dollar has been primarily fueled by narrowing Canada‐US interest rate spreads, advancing commodity prices, and weakness in the US dollar that can be tied to concerns about the economic outlook and the massive US current account deficit25. Figure 3.13 shows the trend in the ratio of the Canadian dollar to the U.S. dollar. The U.S. dollar has depreciated significantly from the beginning of 2002, at CDN $1.59, to the end of 2006, at CDN $1.14. As of January 2008, the U.S. dollar was valued at CDN $1.02 and continued to hover around parity.

Figure 3.13: Quarterly Average Exchange Rates – U.S. Dollar

$1.14

$1.15$1.25$1.30

$1.38

$1.59

‐6.5%

‐16.7%

‐11.2% ‐10.8%

‐2.3%‐2.6%

‐7.2%

‐1.9%

3.7%

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

$1.80

2002‐1

2003‐1

2004‐1

2005‐1

2006‐1

$CDN

‐20.0%

‐15.0%

‐10.0%

‐5.0%

0.0%

5.0%

% change

Canada’s export sector has been hit hard by the appreciating Canadian dollar. US bound shipments represent approximately 76% of total exports26, and the slowdown in the American economy combined with the high Canadian dollar has caused Canadian exports to the US to slow in recent years. Among the hardest hit industries include the automobile industry and the forestry industry. The slowing US housing market has reduced the need for construction materials thus further impacting exports.

25 TD Economics: TD Quarterly Economic Forecast (2007) 26 TD Economics: TD Quarterly Economic Forecast (2007)

45

The potential for the Canadian dollar to further appreciate, combined with diminishing support from the US economy, would pose a severe challenge to Canada’s expansion and widen the gap between resource and manufacturing based regions27. However, the Canadian dollar is expected to average close to or slightly above parity over the next few months, then trend down towards US $0.95 by the end of 200828. At the end of January 2008, the U.S. dollar sat at CDN $1.02, an increase in value compared to the end of 2007 when the Canadian dollar was trading at a high of US $1.10. Both currencies continue to fluctuate around parity with each other. Figure 3.14 displays the year to year trend in quarterly average Bank of Canada interest rates. Between the first quarter of 2002 and the fourth quarter of 2005, interest rates stayed between the 2% ‐ 3.5% range. As the economy grew, interest rates were raised in part to curb inflation, however as the pace of the Canadian economy has slowed somewhat recently reflecting the slowdown south of the border interest rates are beginning to be decreased to stimulate spending and keep the economy moving forward. At the end of January 2008, interest rates were 4.25%. This represents a decrease from the rate of 4.50% seen at the end of 2006. Faced with the prospect of slowing North American growth, the Bank of Canada is expected to further lower interest levels to stimulate consumer spending and position the economy for an upswing in growth.29

27 BMO Capital Markets: North American Outlook (2007) 28 TD Economics: TD Quarterly Economic Forecast (2007) 29 Business and Industry Advisory Committee (BIAC): Economic Review, Autumn 2006 (2006)

46

Figure 3.14: Quarterly Average Interest Rates (Bank of Canada Rate)

4.50%

3.83%

2.75%2.25%

3.50%

3.08%

2.25%

4.42%

‐59.7%

‐28.0%

‐8.3%

35.0%39.4%

22.2%

‐35.7%

5.6%

37.0%60.6%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

2002‐1

2003‐1

2004‐1

2005‐1

2006‐1

Interest Rate %

‐80.0%

‐60.0%

‐40.0%

‐20.0%

0.0%

20.0%

40.0%

60.0%

80.0%

% change

The S&P/TSX Composite Index is an index of stock prices for the largest companies on the Toronto Stock Exchange as measured by market capitalization. The S&P/TSX Composite Index accounts for about 70% of market capitalization for all Canadian based companies listed on the TSX. The size and extensive economic sector coverage of the S&P/TSX Index has made it the foremost indicator of market activity for Canadian equity markets. Transportation changes in the S&P/TSX Composite Index reflect the market view of economic prospects. Consequently, it is a leading indicator for the economy and the transportation sector.

47

Figure 3.15 shows the quarterly average S&P/TSX Composite Index between 2002 and 2006. The Index has experienced relatively positive growth rates throughout the five year period. Recent events, most notably the sub‐prime mortgage crisis in the US have reverberated through markets around the world and caused the S&P/TSX to drop by as much as 600 points in one day.

Figure 3.15: Quarterly Average S&P/TSX Composite Index

9494.928631.94

6477.92

7712.49

12668.4511914.86

‐15.9%

17.0%

11.1%

25.5%

33.0%

10.0%

19.6%14.4%

‐7.5%

0.00

2000.00

4000.00

6000.00

8000.00

10000.00

12000.00

14000.00

2002‐1

2003‐1

2004‐1

2005‐1

2006‐1

Index Points

‐20.0%

‐10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

% change

Leading indicators anticipate the short‐term course of the economy because they are sensitive indicators of what consumers and businesses actually have begun to buy and produce. Changes in the growth of the index reflect future changes in the economy. A composite index of leading indicators is published each month by Statistics Canada, providing an indication of emerging trends in the economy. The composite index produced by Statistics Canada has ten components to ensure adequate coverage. They are the stock market, the money supply, furniture and appliance sales, sales of other durable goods, new orders for durable goods, the ratio of shipments to inventories of finished goods, the average workweek in manufacturing, the real money supply, the US leading index, and business and personal services employment.30

30 Statistics Canada: Canadian Composite Leading Indicator (CI) (2007)

48

Figure 3.16 shows the quarterly average Composite Index of Leading Indicators for Canada between 2002 and 2006.

Figure 3.16: Quarterly Average Composite Index of Leading Indicators (Canada)

220.0212.1

204.1194.2

181.2171.0

2.7% 2.5%

5.2%

6.4%5.5%

4.4%

8.1%7.5%

5.1%

5.5%

0.0

50.0

100.0

150.0

200.0

250.0

300.0

2002‐1

2003‐1

2004‐1

2005‐1

2006‐1

Index Points

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

% change

Between 2002 and 2006, the Composite Index of Leading Indicators increased 49 basis points from 171 to 220, an average annual increase of 6.5%. The Index displayed overall positive yet slightly fluctuating growth over the five year period. The rate of growth in the Index follows a cyclical pattern experiencing cycling high and low peaks. As of December 2007, the Composite Index of Leading Indicators was 229.1 basis points, a further increase of 4.1%. The Organization for Economic Co‐Operation and Development (OECD) also publishes a list of leading indicators for OECD member countries and major non member countries. The components used to establish the leading indicators are slightly different from that used by Statistics Canada. The components used by the OECD also differ slightly from country to country. Much like the leading indicator produced by Statistics Canada, the leading indicators produced by the OECD provide early signals of turning points (peaks and troughs) between expansions and slow downs in economic activity.

49

Figure 3.17 displays the average annual composite leading indicator between 2002 and 2006 for Canada, Germany, Japan, the U.S., and the U.K. All five of these OECD member countries experienced gradual gains in their composite leading indicator. Germany showed the largest gain, ending 2006 at 113.6, while Canada remained the lowest of the five countries at the end of 2006 at 100.9.

Figure 3.17: Average Annual Composite Leading Indicator – Canada to Traditional “Developed” Economies

113.6

101.4

106.4

100.9

97.698.9

96.895.0

101.5

99.4

90

95

100

105

110

115

2002 2003 2004 2005 2006

Index Points

Canada Germany Japan U.S. U.K.

Canada has the lowest growth rate among the five developing countries listed. Starting off 2002, Canada’s leading indicator was in the middle but ended 2006 with the lowest leading indicator. Between 2002 and 2006, Canada’s average annual composite leading indicator increased from 97.6 to 100.9, while the U.S.’s increased from 95.0 to 106.4. The US showed the greatest increase among countries, moving from last to second in terms of leading indicator. As of November 2007, Canada’s CLI stood at 99.6 while the U.S.’s leading indicator was at 106.3. Both numbers represent a decrease from 2006 levels.

50

Figure 3.18 displays the average annual composite leading indicator for Canada, Brazil, China, India, and Russia.

Figure 3.18: Average Annual Composite Leading Indicator – Canada to Emerging International Economies

100.9

129.9

224.3

144.6137.2

97.6102.4

122.8

106.2105.0

90

100

110

120

130

140

150

160

170

180

190

200

210

220

230

2002 2003 2004 2005 2006

Index Points

Canada Brazil China India Russia The contrast between Canada’s leading indicator and the CLI’s of emerging economies is well evident from this chart. China has shown the largest growth rate in the past five years. As of 2006, China’s average annual composite leading indicator increased to 224.3. The latest OECD data continues to point to strong growth in China and India.31 Oil prices increased in recent years due to several factors which include tight worldwide oil production and refinery capacity, a growing global oil demand particularly from emerging economies such as China and India, geopolitical tensions, and natural disasters.32 Between 2002 and the end of 2006, the price of oil per barrel in U.S. dollars increased 182%, from US $21.13 per barrel to US $59.68 per barrel. At the end of January 2008, the price of oil was US $87.55 per barrel, an increase of 47% from the end of 2006.

31 OECD: OECD Composite Leading Indicators (2007) 32 United Nations: World Economic Situation and Prospects 2007 (2007)

51

Figure 3.19 displays the trend in quarterly average oil prices between 2002 and 2006. Following a low of US $21.13 in 2002, oil prices have jumped to reach US $69.62 per barrel in the third quarter of 2006.

Figure 3.19: Quarterly Average Price Oil/Barrel ($US)

$44.16

$59.68

$69.53

$61.47

$26.17

$31.52

$21.13

‐18.3%

49.1%

35.4%

34.7%

4.9%

13.3%

48.5%50.3%

9.9%6.4%

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

$80.00

2002‐1

2003‐1

2004‐1

2005‐1

2006‐1

US$/barrel

‐30.0%

‐20.0%

‐10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

% change

Consumers have felt the effects of rising oil prices at the pump. Increases in the price of oil have resulted in higher fuel costs. Figures 3.20 and 3.21 show the trend in average quarterly unleaded and diesel fuel prices in the Winnipeg region.

52

Figure 3.20: Quarterly Average Unleaded Fuel Prices (Winnipeg Region)

$0.57

$0.88

$1.06$1.00

$0.80$0.70

‐13.7%

‐1.0%

28.3%

‐5.1%

9.5%

17.7%

‐5.6%

28.2%23.7%

14.2%

1.8%

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

2002‐1

2003‐1

2004‐1

2005‐1

2006‐1

$CDN/litre

‐20.0%

‐15.0%

‐10.0%

‐5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

% change

Unleaded fuel prices in the Winnipeg region have fluctuated slightly but show a steady overall increase following the path of oil prices. The decline in price at the end of 2006 proved to be short lived as average unleaded fuel prices in January 2008 were $1.09(CDN)/litre. Diesel fuel prices in the Winnipeg region followed the same trends as unleaded fuel prices. In the first and fourth quarters of 2005, average quarterly diesel fuel prices increased by 26.6% and 31.7% over last year’s prices. The fourth quarter of 2006 saw a decline of 19.2% over the previous year’s prices. In January 2008, diesel fuel was $1.10/litre. For a product that is historically cheaper than unleaded fuel, diesel fuel prices have been quite comparable to unleaded prices recently.

53

Figure 3.21: Quarterly Average Diesel Fuel Prices (Winnipeg Region)

$0.81

$0.98$1.01

$0.85

$0.76$0.63$0.59

‐1.2%‐4.6%

‐19.2%

5.9%

11.6%

31.7%

26.6%

14.4%15.5%

‐12.9%

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

2002‐1

2003‐1

2004‐1

2005‐1

2006‐1

$CDN/litre

‐30.0%

‐20.0%

‐10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

% change

Growing demand for passenger and freight transportation continues to drive demand for unleaded and diesel fuel in Canada. The resulting increases in fuel prices have contributed to higher service costs in all modes of transportation. The service costs may see further increases if oil and conversely fuel prices continue on an upward trend.

54

4.0 Market, Trade, and Transportation Trends

This section focuses on Canadian import and export activities in the world marketplace. This includes an overview of both Traditional and Emerging world economies, summaries of Canadian trading with Emerging markets, and a summary of modal traffic entering and leaving Canada. Finally, a listing of Emerging Canadian Transportation Issues for 2006 and 2007 will be found at the end of the chapter.

Markets

In the world marketplace there are several economies that drastically affect international markets. Following the completion of World War II, the United States emerged undamaged and found itself in the position as a world leader. Similarly, both Japan and the United Kingdom rebuilt their countries into major markets. The recently developed European Union has developed into a leading world economy. The world markets now revolve around the state(s) of the U.S. Dollar, Yen, Pound, and Euro. Fluctuations in these markets can have far reaching effects on the economies throughout the world. Figure 4.1 compares the annual growth of the major world economies (based on Gross Domestic Product). In addition, Canada has been included for comparison.

Figure 4.1: Rate of Change, Canada to Traditional “Developed” Economies

‐GDP in Constant 2000 U.S. Dollars3334

‐1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

2000 2001 2002 2003 2004 2005 2006

% Change

Canada European Union (€) Japan United Kingdom United States

33 “Real GDP (2000 dollars) Historical”, United States Department of Agriculture Economic Research Service. 19 December 2007 <http://www.ers.usda.gov/data/macroeconomics/> 34 European Union refers to those countries that use the Euro (€) as a national currency. A listing of these countries is found in Table 4.1.

55

Overall, each of these leading economies has experienced consistently positive growth over the last five years (with the exception of Japan in 2002). When compared to the major world economies, Canada does not appear to be influenced by any single country. Although the majority of Canadian trade is with the United States the flow of Canadian growth does not appear to follow the United States in either a direct or delayed fashion (as seen by the sharp rise [2002] and decline [2003]). While the Canadian level of growth is higher than that of Japan, the United Kingdom, and the European Union, this should not be mistaken for economy size. In 2006, the Canadian Gross Domestic Product was approximately $852 billion35. While Canada posted a higher level of growth, the GDP’s of Japan, the United Kingdom, and the European Union were, respectively, $5214 billion, $1649 billion, and $6706 billion. Figure 4.2 displays the annual GDP levels of Canada and the four traditional economies from 2000 to 2006.

Figure 4.2: Canada and Traditional International Economies GDP


$714

$727

$752

$767

$789

$826

$852

$6,017

$6,241

$6,302

$6,346

$6,476

$6,568

$6,706

$4,746

$4,756

$4,741

$4,803

$4,933

$5,062

$5,214

$1,438.28

$1,471.39

$1,497.41

$1,530.27

$1,578.28

$1,607.64

$1,649.11

$9,817

$9,891

$10,049

$10,321

$10,756

$11,135

$11,544

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

2000 2001 2002 2003 2004 2005 2006

$US Billions (2000)

Canada European Union (€) Japan United Kingdom United States

35 All GDP figures based on 2000 $U.S. 36 “Real GDP (2000 dollars) Historical”, United States Department of Agriculture Economic Research Service. 19 December 2007 <http://www.ers.usda.gov/data/macroeconomics/> 37 European Union refers to those countries that use the Euro (€) as a national currency. A listing of these countries is found in Table 4.1.

56

As previously displayed in Figure 4.2, the GDP’s of each of the “traditional” economies has been increasing over the last six years (with the exception of Japan in 2002). When compared to the leading “traditional” international economies, Canada’s GDP appears as a fraction. The United States, Japan, United Kingdom, and European Union are world leaders in research and production throughout a variety of industries. Similarly, these countries represent major markets for Canadian products. To better understand these traditional economies, outlines have been included which detail current and historic trade with Canada and summaries regarding the development and marketing of these countries.

European Union

Imports (To Canada) 200638

Rank 200639

Rank 200540 Growth

Exports (From Canada)

2006

Rank 2006

Rank 2005 Growth

Value $ $31,894,479,237 4 3 1.82% $16,915,805,322 2 2 10.63% Weight (kg) 12,223,868,962 3 2 ‐2.51% 84,864,293,240 2 2 ‐1.65%

The European Union (EU) is neither a single country nor market. Rather, it is a “community” of European countries that maintain common laws and policies and promote the free movement of goods, services, persons, and capital. The foundation for the European Union began in 1951 with the creation of the “European Coal and Steel Community”, a “common market” between the nations of France, West Germany, Italy, Luxembourg, Belgium, and the Netherlands. The success of other market mergers between these countries led to the creation of a commission, the European Community, in 1967 to oversee the arrangement. Membership into the European Community began to increase in 1973 and continued to grow. As well, the scope of the commission’s authority expanded from strictly trade economics to include foreign and defence policies, justice and law, and economic policy. This expansion in the early 1990’s led to evolution of the “European Community” to the European Union. In 1999, a common currency, the Euro (€), was introduced as a unit of exchange between members of the European Union. In 2002, a physical currency was launched as the official currency of several member nations.

38 Import and Export data is collected by Statistics Canada and is based on a “Canadian perspective”. Imports originate from other countries and are destined for Canada, while Exports originate in Canada and are transported to other countries. 39 Rank refers to the ranking of a country’s level of trade with Canada against Canada’s other trading partners. Ranking has been based by both Value and by total Weight (kgs). 40 As the European Union is not an official trading partner of Canada, all trade ranks are considered unofficial.

57

In 2006, approximately 25 nations were members of the European Union. Approximately 12 of these nations have adopted the Euro as their national currency. The GDP and growth values of the EU measured in Figures 4.1 and 4.2 are based on these 12 Euro using nations. Canadian trade statistics report trade with individual member states, as opposed to the European Union. For this review of “traditional” economies, the European Union will consist of the nations listed in Figure s 4.3.

Table 4.1: 2006 European Union Members, Canadian Trade Data Imports (To Canada) 2006 Exports (From Canada) 2006 Value Weight (kg) Value Weight (kg)

$1,405,604,424 441,384,675 Austria

$457,654,451 72,706,151

$1,960,178,487 1,318,888,185 Belgium

$2,270,174,075 26,093,111,291

$1,117,232,770 777,649,191 Finland

$434,315,221 563,222,716

$5,174,884,759 1,486,526,967 France

$2,886,593,276 2,617,379,381

$11,114,978,667 3,256,426,102 Germany

$3,878,219,066 28,856,586,914

$205,426,361 184,138,183 Greece

$152,719,580 183,947,400

$2,549,947,419 103,860,901 Ireland

$379,839,810 121,218,513

$4,915,564,170 2,552,927,332 Italy

$1,892,948,150 4,014,247,463

$95,517,881 69,417,287 Luxembourg

$162,551,411 152,522,372

$1,596,419,873 955,838,287 Netherlands

$3,059,989,113 13,088,928,269

$358,600,251 221,739,423 Portugal

$150,714,897 558,873,720

$1,400,124,175 855,072,429 Spain

$1,190,086,272 8,541,549,050

58

Figure 4.3 displays the annual rate of change (growth) between the value of imports arriving to Canada from the European Union and the value of Canadian exports destined for the EU.

Figure 4.3: Rate of Change, Canadian Exports & Imports To/From European Union‐ Value

2

2

2

2 3

4

2

22

2 2

2

‐4.00%

‐2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

2001 2002 2003 2004 2005 2006

% Change

Imports Exports Import Rank Export Rank Imports (Value): In 2006, Canada imported over $31.8 billion worth of goods from the nations of the European Union. This included pharmaceutical products, fossil fuels, automobiles and industrial vehicles, alcohol (beer, wine, and spirits), aircraft, and industrial machinery. In most cases, the distribution of these major categories was spread out among the EU members, with no single country producing an overwhelming majority of the commodity’s value. Based on total value, the largest supplier of EU imports to Canada was Germany ($11.1 billion). Much of this value was from automobiles and industrial vehicles, pharmaceutical products, engines, and industrial machinery. Exports (Value): In 2006, Canada exported over $16.9 billion worth of goods to the members of the European Union. High‐value Canadian commodities included aircraft and aircraft parts, fossil fuels, diamonds, and mineral resources (e.g. uranium, iron, nickel, aluminum, etc.). Overall, major EU destinations of Canadian exports (in terms of value) were Germany ($3.8 billion), the Netherlands ($3.0 billion), France ($2.8 billion), and Belgium ($2.2 billion).

59

The distribution of Canadian exports by province to the European Union is listed in Figure 4.4.

Figure 4.4: Province of Origin, Canadian Exports to European Union‐ Value

($ Millions)

$897.6

$0.1

$1,915.9

$949.1 $715.6$262.7

$5,044.3

$5,938.2

$134.5 $52.0 $306.9$698.2

$0.6$0.0

$1,000.0

$2,000.0

$3,000.0

$4,000.0

$5,000.0

$6,000.0

$7,000.0

British Columbia

Alberta

Saskatchewan

Manitoba

Ontario

Quebec

New Brunswick

Prince Edward Is.

Nova Scotia

Newfoundland Labrador

Northwest Terr.

Nunavut

Yukon Terr.

$ Millions

The majority of the value of EU bound exports originated in Quebec (35%) and Ontario (30%). In addition, a significant portion of exports (by value) originated in the Northwest Territories ($897.6 million). This was due to the export of diamonds from the region. The historic distribution of Canadian exports by geographic region is displayed in Figure 4.5.41

Figure 4.5: Region of Origin, 2000‐2006 Canadian Exports to European Union‐ Value

($ Millions 2006)

$4,415.2 $3,965.2 $3,433.1 $3,695.0 $3,933.4 $4,093.6 $3,843.3

$7,813.1 $8,171.1 $8,615.2 $8,527.2 $8,351.8 $9,002.1 $10,982.5

$1,123.4 $1,289.5 $1,047.9 $1,140.1 $1,543.4 $1,392.5 $1,191.7$716.6 $775.4 $835.5 $515.5 $715.8 $802.9 $898.4

0%

20%

40%

60%

80%

100%

2000 2001 2002 2003 2004 2005 2006Western Eastern Atlantic Territories

Since 2000, the majority of the value of Canadian exports to the European Union originated in the Eastern region (Ontario and Quebec). In 2006, the value of these exports increased by nearly $2 billion to $10.9 billion from 2005. As well, the Eastern share of EU bound exports increased to 64.9% from 58.9% in 2005.

41 Canadian Regions have been designated as Western (BC, AB, SK, MB), Eastern (ON, QC), Atlantic (NB, PEI, NS, NF), and Territories ((NWT, YT, NT).

60

Figure 4.6 displays the annual rate of change in the weight of Canadian exports and European Union imports in 2006.

Figure 4.6: Rate of Change, Canadian Exports & Imports To/From European Union‐ Value

4

4

32

2

3

2

2

2 22 2

‐50.00%‐40.00%‐30.00%‐20.00%‐10.00%0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%90.00%

2001 2002 2003 2004 2005 2006

% Change

Imports Exports Import Rank Export Rank Imports (Weight): In 2006, Canada imported over 12.2 billion kilograms of goods from the European Union. These imports included fossil fuels, industrial manufacturing machinery, alcohol (beer, wine, and spirits), automobiles and automobile parts, paper products, and particleboard/fiberboard. Overall, major EU suppliers to Canada included Germany (3.2 billion kilograms), Italy (2.5 billion kilograms), France (1.4 billion kilograms), and Belgium (1.3 billion kilograms). Exports (Weight): In 2006, Canada exported over 84.8 billion kilograms of goods to the European Union. Approximately 72% of these exports (61 billion kilograms) were classified as “low value transactions” and “confidential commodities”. Other major weight‐based exports included mineral resources (e.g. iron, potassium, aluminum, etc.), fossil fuels, agricultural products (e.g. durum, peas, soya beans, linseed, etc.), and timber and forestry products. Overall, major EU destinations of Canadian exports included Germany (28.8 billion kilograms), Belgium (26.1 billion kilograms), the Netherlands (13.1 billion kilograms), and Spain (8.5 billion kilograms).

61

The distribution of Canadian exports by province to the European Union is listed in Figure 4.7.

Figure 4.7: Province of Origin, Canadian Exports to European Union‐ Weight

(Millions kg)

11.05 0.010.095,293.82

486.1617.3098.44

66,081.13

2,762.91507.032,319.641,139.006,147.72

0.00

10,000.00

20,000.00

30,000.00

40,000.00

50,000.00

60,000.00

70,000.00

British Columbia

Alberta

Saskatchewan

Manitoba

Ontario

Quebec

New Brunswick

Prince Edward Is.

Nova Scotia


Northwest Terr.

Nunavut

Yukon Terr.

KG Millions

In 2006, approximately 78% of the total weight of Canadian goods destined for the European Union originated from Quebec. The Western provinces produced 12% of the total weight of exports, while the Atlantic provinces produced 7%. The historic distribution of Canadian exports by geographic region is displayed in Figure 4.8.

Figure 4.8: Region of Origin, 2000‐2006 Canadian Exports to European Union‐ Weight

(Millions kg)

8,034.6 9,709.1 7,359.5 9,872.6 10,770.0 10,680.0 10,113.4

33,919.3 70,491.6 59,829.8 61,399.8 66,713.3 67,622.6 68,844.0

6,877.06,567.3 6,293.9 7,114.6 7,121.5 7,974.1 5,895.7591.2 149.0 184.3 6.1 6.5 9.6 11.1

0%

20%

40%

60%

80%

100%


From 2000 through 2006, the majority of Canadian export tonnage to the European Union originated in the Eastern region. During this time, between 65%‐80% of Canada’s annual exported tonnage to the European Union originated from Quebec. From 2003 to 2005, Western exports remained at 12%, while Atlantic exports fluctuated between 8% and 9%. In 2006, the Eastern portion of weight‐based exports increased to 81.2% (from 78.3% in 2005), while the percentage of Western and Atlantic exports both decreased, 11.9% and 6.9% respectively. Since 2001, exports from the Territories have accounted for roughly 0.01% of total export weight.

62

Japan

Imports (To Canada)

2006

Rank 2006

Rank 2005

GrowthExports

(From Canada) 2006

Rank 2006

Rank 2005

Growth

Value $ $15,333,503,494 4 4 3.60% $9,442,743,982 3 2 1.15% Weight (kg) 4,285,806,570 8 14 22.19% 19,956,154,459 5 5 8.13%

Following defeat in World War II, Japan rebuilt itself as a technology and manufacturing leader. Cooperation between government and industry, strong work ethic, and the development of technology has helped Japan rank as the world’s second largest economy.42 With a large population and limited harvesting space, Japan must import a large percentage of its food. Japan imports the majority of its raw materials from other countries. As well, Japan has a high dependence on foreign oil and petroleum. Figure 4.9 displays the annual rate of change (growth) between the value of Canadian imports from Japan and the value of Canadian exports to Japan.

Figure 4.9: Rate of Change, Canadian Exports & Imports To/From Japan‐ Value

2

3

3

4

44

2

2 2

22

3

‐20.00%

‐15.00%

‐10.00%

‐5.00%

0.00%

5.00%

10.00%

2001 2002 2003 2004 2005 2006

% Change

Imports Exports Import Rank

Export Rank Imports (Value): In 2006, Canada imported over $15.3 billion worth of goods from Japan. The value of imports from Japan has fallen since 2000, when Japan was ranked as Canada’s second largest source of imports. However since 2005, the value of imports has begun to increase. Major imports from Japan included automobiles and automobile parts, industrial vehicles/machinery, aircraft parts, pharmaceutical products, computers, and circuits.

42 “Economy‐ Japan”, The World Factbook. Central Intelligence Agency: 1 May, 2008 <https://www.cia.gov/library/publications/the‐world‐factbook/geos/ja.html>

63

Exports (Value): In 2006, Canadian exports to Japan were worth over $9.4 billion. Despite an overall increase of 1.15% from 2005, Japan’s ranking as a Canadian export partner fell from second to third. This was due to Canada’s increased trade with the United Kingdom (see United Kingdom). From 2000 to 2003, the total value of exports to Japan decreased. However, since 2004, the total value of exports destined for Japan has begun to increase. Canadian exports to Japan have consisted primarily of raw materials (e.g. forestry products, fossil fuels, and minerals {copper, aluminum, nickel, etc.}) and food products (e.g. pork, wheat, soy beans, barley, potatoes, etc.). Aircraft and aircraft parts were among the few major manufactured products exported to Japan. The values of Canadian exports to Japan by the province of origin are displayed in Figure 4.10.

Figure 4.10: Province of Origin, Canadian Exports to Japan‐ Value

($ Millions)

$0.6 $0.0$0.1$133.1$91.2$19.2$56.9

$937.0$1,212.4

$470.8$478.5

$1,293.3

$4,749.6

$0.0$500.0

$1,000.0$1,500.0$2,000.0$2,500.0$3,000.0$3,500.0$4,000.0$4,500.0$5,000.0

British Columbia

Alberta

Saskatchewan

Manitoba

Ontario

Quebec

New Brunswick

Prince Edward Is.

Nova Scotia


Northwest Terr.

Nunavut

Yukon Terr.

$ Millions

Approximately 50% of the total value of Canadian exports to Japan originated in British Columbia. Other major export origins (by value) included Alberta (14%), Ontario (13%), and Quebec (10%).

64

The historic distribution of Canadian exports by geographic region is displayed in Figure 4.11.

Figure 4.11: Region of Origin, 2000‐2006 Canadian Exports to Japan‐ Value

($ Millions 2006)

$8,441.4 $7,392.8 $7,009.9 $6,254.8 $6,474.6 $6,651.9 $6,992.2

$1,708.2 $1,680.1 $1,834.2 $2,171.8 $2,163.3 $2,322.3 $2,149.4

$557.8 $438.5 $585.1 $465.7 $386.5 $361.5 $300.5$0.2 $0.3 $0.3 $0.6 $0.7 $0.2 $0.7

0%

20%

40%

60%

80%

100%


Since 2000, the majority of the value of Japan bound exports originated from the Western region of Canada. This was due to the large percentage of exports from British Columbia (approximately 45%‐53% of Canada’s total export value). The proportion of Atlantic exports to Japan has declined at a gradual rate since 2003. The percentage of export value originating in the Eastern region decreased to 22.8% from 24.9% in 2005. Since 2000, the portion of exports originating from the East has been increasing, with the exception of a slight decrease in 2004. Few of Canada’s exports originate from the Territories. Figure 4.12 displays the rate of change in the weight of Canadian exports and Japanese imports in 2006.

Figure 4.12: Rate of Change, Canadian Exports & Imports To/From Japan‐ Weight

8

14

9

16

12

13

5

5

5

44

4

‐40.00%

‐20.00%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

140.00%

160.00%

2001 2002 2003 2004 2005 2006

% Change

Imports Exports Import Rank Export Rank

65

Imports (Weight): In 2006, Canada imported over 4.2 billion kilograms of goods from Japan. These imports included industrial machinery (e.g. steam/vapor condensers, heat exchangers, milling machines, etc.), automobiles and automobile parts, fasteners (e.g. nuts, bolts, etc.), video games, and industrial vehicles. The total tonnage of Japanese imports has fluctuated over the past six years. In addition, Japan’s ranking as a Canadian import partner has shifted drastically. In 2006, Japan was ranked as Canada’s eighth largest import partner (by weight), its highest ranking this decade. The previous year (2005), Japan had ranked fourteenth, its second lowest ranking since 2000. Exports (Weight): In 2006, Canada exported nearly 20 billion kilograms of goods to Japan. Between 2000‐2003, the total weight of exports to Japan annually decreased. Since 2004, the weight of exports has begun to increase at a growing rate. Major weight based exports included fossil fuels, forestry products, agricultural products (e.g. wheat, barley, soya beans, etc.), minerals (e.g. iron, copper, aluminum), and animal products. Figure 4.13 displays the weight of Canada’s exports to Japan by the province of origin.

Figure 4.13: Province of Origin, Canadian Exports to Japan‐ Weight

(Millions kg)

0.13 0.000.011,308.28

18.089.2571.30469.62455.96868.951,816.98

4,547.14

10,390.46

0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

British Columbia

Alberta

Saskatchewan

Manitoba

Ontario

Quebec

New Brunswick

Prince Edward Is.

Nova Scotia


Northwest Terr.

Nunavut

Yukon Terr.

KG Millions

In 2006, approximately 52% of the total weight of Canadian exports to Japan originated in British Columbia. Although Ontario and Quebec exported high valued goods (13% and 10% of the total Canadian export value, respectively), these provinces each only accounted for 2% of the total weight of Canadian exports to Japan. In a similar fashion, Newfoundland accounted for 7% of the total weight of exports, but only 1% of the total exports by value.

66


Figure 4.14: Region of Origin, 2000‐2006 Canadian Exports to Japan‐ Weight

(Millions kg)

23,971.1 19,754.3 17,782.4 15,309.214,258.2 16,182.7 17,623.5

1,115.2 1,026.3 2,179.6 925.61,199.7 1,406.9

757.1 707.5 1,309.71,151.71,247.9 903.2 969.2 963.1

0.0 0.0 0.1 0.0 0.10.00.1

0%

20%

40%

60%

80%

100%


In 2006, approximately 88.3% of the total tonnage of Canadian exports to Japan originated from the Western region. This was due to the high percentage of goods that originated in British Columbia (53%) and Alberta (20%). This is similar to previous years. The percentage of exports from the Eastern region decreased to 4.6% in 2006 from 7.1% in 2005, while the percentage of exports from the Atlantic region increased from 5.2% in 2005 to 7.1% in 2006.

United Kingdom

Imports (To Canada)

2006

Rank 2006

Rank 2005 Growth

Exports (From Canada)

2006

Rank 2006

Rank 2005 Growth

Value $ $10,843,206,881 6 5 1.92% $10,063,379,252 2 3 20.22% Weight (kg) 8,828,225,255 6 5 ‐12.74% 7,894,369,395 9 10 13.85%

At its height in the 19th century, the United Kingdom occupied a quarter of the earth’s surface with the establishment of a variety of colonies (including Canada, United States, Australia, New Zealand, South Africa, India, and Pakistan). Although many of the colonies of the British Empire have either declared, or were granted, independence, the influence of the United Kingdom is still felt. In 2006, the United Kingdom was ranked as the fifth largest economy in the world.43 44 Although the United Kingdom is a member of

43 “Total GDP 2006”. World Bankd: 12 May, 2008 <http://siteresources.worldbank.org/DATASTATISTICS/Resources/GDP.pdf> 44 In 2006, Canada was ranked as the world’s eighth (8th) largest economy by total GDP by the World Bank.

67

the 25‐nation European Union, it has chosen to maintain its own currency, the Pound Sterling, rather than adopt the Euro. Figure 4.15 displays the annual rate of change (growth) between the total value of Canadian imports from the United Kingdom (UK) and the total value of Canadian exports to the UK.

Figure 4.15: Rate of Change, Canadian Exports & Imports To/From United Kingdom‐ Value

65

55

5

5

2

3

33

3

3

‐25.00%‐20.00%‐15.00%‐10.00%‐5.00%0.00%5.00%10.00%15.00%20.00%25.00%30.00%35.00%

2001 2002 2003 2004 2005 2006

% Change

Imports Exports Import Rank Export Rank Imports (Value): In 2006, Canada imported over $10.8 billion worth of goods from the United Kingdom. Although this was an increase of 1.9% from 2005, the UK’s ranking as a trade partner shifted from fifth to sixth (being replaced by Germany). Major imports from the UK included fossil fuels, pharmaceutical products, aircraft and aircraft parts, automobiles and automobile parts, industrial vehicles, and tea. Exports (Value): In 2006, Canada exported over $10 billion worth of goods to the United Kingdom. This was an increase of over 20.2% from 2005. In addition to the increase in export value, the UK’s ranking increased from third in 2005 to second in 2006 (replacing Japan). Major exports to the UK included minerals (e.g. gold, uranium, nickel, iron, etc.), diamonds, aircraft and aircraft parts, fossil fuels, communications equipment, forestry products, and agricultural products (e.g. wheat, kidney beans, apples, etc.).

68

The distribution of Canadian exports by province to the United Kingdom is listed below in Figure 4.16.

Figure 4.16: Province of Origin, Canadian Exports to United Kingdom‐ Value

($ Millions)

$477.4$0.0$0.5$181.8$159.0$24.9$59.7

$1,611.3

$6,298.4

$82.9$447.2$298.7$421.7

$0.0

$1,000.0

$2,000.0

$3,000.0

$4,000.0

$5,000.0

$6,000.0

$7,000.0

British Columbia

Alberta

Saskatchewan

Manitoba

Ontario

Quebec

New Brunswick

Prince Edward Is.

Nova Scotia


Northwest Terr.

Nunavut

Yukon Terr.

$ Millions

In 2006, approximately 63% of the total value of Canadian exports to the UK originated from Ontario. Canada’s other major exporters included Quebec (16%), Northwest Territories (5%), British Columbia (4%), and Saskatchewan (4%). The historic distribution of Canadian exports by geographic region is displayed in Figure 4.17.

Figure 4.17: Region of Origin, 2000‐2006 Canadian Exports to United Kingdom‐ Value

($ Millions 2006)

$884.4 $809.1 $802.1 $769.8 $857.3 $1,008.8 $1,250.4

$5,155.0 $4,387.4 $3,562.9$4,379.6 $5,782.5 $6,181.0 $7,909.7

$378.1 $336.0 $341.5$346.7 $401.6 $439.9 $425.4

$210.8 $237.3 $291.4$1,150.5 $1,008.9 $740.8 $477.9

0%

20%

40%

60%

80%

100%


In 2006, approximately 78.6% of the total value of Canadian exports to the UK originated from the Eastern region. Throughout the decade, the majority of the value of Canadian exports to the UK have originated from the Eastern region. Although the value of exports from the Western region increased in 2006 (1,250 million from $1,008 million in 2005), it’s proportion of Canadian exports remained at 12%. The value of goods originating from the Territories has continued to decrease. The percentage of exports from the Northwest Territories has decreased rapidly since 2004, falling from 12.5% to 4.7% in 2006.

69

Figure 4.18 displays the rate of change in the weight of Canadian exports and United Kingdom imports in 2006.

Figure 4.18: Rate of Change, Canadian Exports & Imports To/From United Kingdom‐ Weight

6

53

3

3

2

9

10

998

6

‐30.00%

‐25.00%

‐20.00%

‐15.00%

‐10.00%

‐5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

2001 2002 2003 2004 2005 2006

% Change

Imports Exports Import Rank Export Rank Imports (Weight): In 2006, the total weight of Canadian imports from the UK was 8.8 billion kilograms, a 12.7% decrease from the previous year. These imports included fossil fuels, industrial machinery, industrial vehicles, pharmaceutical products, paper, alcohol (e.g. beer), automobiles and automobile parts, and marine engines. Exports (Weight): In 2006, Canada exported approximately 7.8 billion kilograms of goods to the United Kingdom. This was an increase of 13.8% from 2005. In addition, the UK’s rank as an export destination increased from tenth in 2005 to ninth in 2006. After a period of decrease between 2000‐2004, the weight of Canadian exports began to increase in 2005. Heavy Canadian exports included minerals (e.g. iron, nickel, uranium, aluminum, etc.), fossil fuels, newsprint/paper products, agricultural products (e.g. wheat, kidney beans, lentils, apples, etc.), and forestry products. Approximately 1.8 billion kilograms were classified as “low‐value export transactions” and “confidential commodities”. This was the highest weight belonging to any single commodity category.

70

The distribution of Canadian exports by province to the United Kingdom is listed in Figure 4.19.

Figure 4.19: Province of Origin, Canadian Exports to United Kingdom‐ Weight

(Millions kg)

3.46 0.000.08

946.32

70.4216.8486.27

4,274.13

356.49127.04204.42302.26

1,506.64

0.00500.00

1,000.001,500.002,000.002,500.003,000.003,500.004,000.004,500.00

British Columbia

Alberta

Saskatchewan

Manitoba

Ontario

Quebec

New Brunswick

Prince Edward Is.

Nova Scotia


Northwest Terr.

Nunavut

Yukon Terr.

KG Millions

Approximately 54% of the total weight of Canadian exports to the United Kingdom originated in Quebec. However, these exports represented only 16% of the total value of Canadian exports to the United Kingdom. Similarly, Ontario exports, which represented 63% of the total value, only represented 5% of the total weight of exports to the United Kingdom. The historic distribution of Canadian exports by geographic region is displayed in Figure 4.20.

Figure 4.20: Region of Origin, 2000‐2006 Canadian Exports to United Kingdom‐ Weight

(Millions kg)

2,014.8 1,876.7 1,797.4 1,660.8 1,613.32,356.0 2,140.4

6,940.4 6,558.5 5,358.3 4,338.1 4,028.13,804.3

4,630.6

1,279.7 1,407.1 1,086.1 980.4 795.5 766.7 1,119.91.4 1.8 3.1 12.7 8.5 6.9 3.5

0%

20%

40%

60%

80%

100%


In 2006, the majority of export tonnage destined for the UK originated in the Eastern region (58.7%). Throughout the decade, the majority of the total weight of exports originated in Quebec (ranging from 50%‐64%). In 2005, Atlantic exports (by weight) increased, while Western exports decreased. Annually, the Territories generate less than 1% of the total weight of exports destined for the UK.

71

United States

Imports (To Canada)

2006

Rank 2006

Rank 2005

GrowthExports

(From Canada) 2006

Rank 2006

Rank 2005

Growth

Value $ $217,597,263,415 1 1 ‐1.08% $358,738,657,184 1 1 ‐4.19% Weight (kg) 193,842,027,233 1 1 ‐8.24% 365,426,849,032 1 1 ‐0.21%

Following the collapse of the Soviet Union in the 1990’s, the United States emerged as the world’s only remaining superpower. Operating the world’s largest economy, the United States is a leader in research and manufacturing. In particular, many American firms are world leaders in high technology industries such as pharmaceutical/ biomedical, aerospace, and computers. In addition, the United States generates a wide variety of natural resources. Figure 4.21 displays the annual rate of change (growth) between the value of Canadian imports from the United States and the value of Canadian exports to the United States.

Figure 4.21: Rate of Change, Canadian Exports & Imports To/From United States‐ Value

1

1

1

1 1

1

1

1

1

1

1

1

‐12.00%

‐10.00%

‐8.00%

‐6.00%

‐4.00%

‐2.00%

0.00%

2.00%

4.00%

6.00%

2001 2002 2003 2004 2005 2006

% Change


72

Imports (Value): In 2006, Canada imported over $217.5 billion worth of goods from the United States. The United States is Canada’s largest source of imports, though the total value of imports has been decreasing annually. Major American imports included automobiles and automobile parts, fossil fuels, pharmaceutical products, electricity, aircraft and aircraft parts, and books/newspapers/periodicals. Exports (Value): In 2006, Canada exported $358.7 billion worth of goods to the United States. Between 2000 to 2003, the level of Canadian exports had been on the decline, but increased in 2004 and 2005. Unfortunately, Canadian exports decreased by 4.19% in 2006. Despite this decrease, the United States remained as Canada’s largest export market, receiving approximately 81.62% of Canada’s total export value (see Table 4.2). Canada’s exports to the United States included fossil fuels, automobiles and automobile parts, forestry products, minerals (e.g. aluminum, gold, copper, nickel, etc.), and pharmaceutical products. Figure 4.22 displays the value of Canada’s exports to the United States by the province of origin.

Figure 4.22: Province of Origin, Canadian Exports to United States‐ Value

($ Millions)

$2.1 $7.2$0.6$2,787.2$3,855.8$629.9$9,384.7

$56,902.2

$171,808.7

$8,698.2$10,436.7

$73,032.8

$21,192.8

$0.0$20,000.0$40,000.0$60,000.0$80,000.0$100,000.0$120,000.0$140,000.0$160,000.0$180,000.0$200,000.0

British Columbia

Alberta

Saskatchewan

Manitoba

Ontario

Quebec

New Brunswick

Prince Edward Is.

Nova Scotia


Northwest Terr.

Nunavut

Yukon Terr.

$ Millions

In 2006, approximately 48% of the total value of Canadian exports originated in Ontario. Other major export origins included Alberta (20%) and Quebec (16%).

73


Figure 4.23: Region of Origin, 2000‐2006 Canadian Exports to United States‐ Value

($ Millions 2006)

$102,039.7 $101,085.2 $88,886.1 $92,473.8 $101,112.6 $114,529.7 $113,360.4

$295,923.0 $282,858.8 $282,008.1 $246,898.4 $249,908.7 $242,058.6 $228,710.8

$16,398.9 $17,214.5 $18,625.1 $17,298.2 $17,357.2 $17,822.2 $16,657.5$32.8 $30.2 $54.0 $9.9$19.9$58.8$74.4

0%

20%

40%

60%

80%

100%


Since 2000, the majority of Canadian exports to the United States have originated from the Eastern region, as Ontario has been the largest Canadian exporter to the United States (in terms of value). The proportion of Eastern exports has been decreasing since 2003 (from 69.2% in 2003 to 63.7% in 2006). Prior to 2005, Ontario produced the majority of the total value of Canadian exports to the United States. The proportion of Ontario exports has been decreasing annually since 2003, after peaking at 56% in 2002. The proportion of exports leaving from the Western region has been increasing due to an increasing level of exports from Alberta. Overall, the change in distribution has been due to the fluctuating trade values from Ontario and Alberta. The export shares (by value) of the remaining provinces have held steady over the last 3 years with little fluctuation. Since 2000, change in the value of exports from the Atlantic and Territory regions has been less than 1%.

74

Figure 4.24 displays the annual rate of change (growth) between the total weight of Canadian exports to the United States and the total weight of Canadian imports from the United States in 2006.

Figure 4.24: Rate of Change, Canadian Exports & Imports To/From United States‐ Weight

1

1

1

11

1

111

11

1

‐10.00%

‐5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

2001 2002 2003 2004 2005 2006

% Change

Imports Exports Import Rank Export Rank Imports (Weight): In 2006, Canada imported over 193.8 billion kilograms from the United States. This accounted for approximately 62.3% of the total weight of Canadian imports (see Table 4.5). The level of growth of American tonnage has been fluctuating over the last decade. A period of limited growth occurred from 2002 to 2003, followed by periods of rapid growth in 2004 and 2005. Despite a decline of 8.2% in 2006, the United States has remained Canada’s first ranked trading partner (based on weight). Imports from the United States included industrial machinery (e.g. injection‐moulding machines, heat exchangers, etc.), fossil fuels, minerals (e.g. iron, aluminum, etc.), automobile parts, timber and forestry products, and agriculture products (e.g. corn, soy beans, etc.). Exports (Weight): In 2006, Canada exported over 365.4 billion kilograms of goods to the United States. This was a decrease of 0.21% from 2005. Prior to this, the weight of Canadian exports to the United States had grown annually (though at a slow rate, never more than 5%). Major exports to the United States included fossil fuels, forestry products, minerals (e.g. potassium chloride, iron, aluminum, etc.), automobiles and automobile parts, and agricultural products (e.g. oats, wheat, etc.).

75

Figure 4.25 displays the weight of Canada’s exports to the United States by the province of origin.

Figure 4.25: Province of Origin, Canadian Exports to the United States‐ Weight

(Millions kg)

0.40 1.360.184,559.3314,973.23

493.4313,054.82

36,634.33

66,111.11

7,849.3928,944.75

156,000.18

36,804.34

0.0020,000.0040,000.0060,000.0080,000.00100,000.00120,000.00140,000.00160,000.00180,000.00

British Columbia

Alberta

Saskatchewan

Manitoba

Ontario

Quebec

New Brunswick

Prince Edward Is.

Nova Scotia


Northwest Terr.

Nunavut

Yukon Terr.

KG Millions

In 2006, the largest tonnage of goods exported to the United States originated from Alberta (43%). Although Ontario exports accounted for 48% of the total value, they only represented 18% of the total weight. Quebec and British Columbia each exported approximately 10% of export tonnage to the United States. The historic distribution of Canadian exports by geographic region is displayed in Figure 4.26.

Figure 4.26: Region of Origin, 2000‐2006 Canadian Exports to United States‐ Weight

(Millions kg)

203,914.8 204,868.5 205,673.5 207,964.6 221,122.9 223,753.0 229,598.7

98,221.5 95,908.2 100,951.0 101,600.0 105,387.5 107,301.7 102,745.4

32,377.7 35,469.4 40,707.8 38,824.3 37,155.2 35,150.5 33,080.831.0 15.3 4.3 25.4 3.0 1.8 1.9

0%

20%

40%

60%

80%

100%


Since 2000, the majority of the total weight of Canadian exports to the United States has originated in the Western region. The proportion of these exports has been growing since 2003 (from 59.7% in 2003 to 62.8% in 2006). The distribution of exports from the Eastern region has never fluctuated more than 1% since 2000. The percentage of exports from the Atlantic region has been decreasing since 2003.

76

Emerging Markets

In addition to established major world economies, several countries are beginning to emerge as growing markets which could potentially become major world leaders. Numerous analysts have catalogued their projections in various listings45. Among those emerging global markets that appear frequently include Brazil, China, India, Mexico, Russia, and South Korea. Figure 4.27 displays the (GDP) growth rates of these countries and includes a comparison with the Canadian market.

Figure 4.27: Rate of Change, Canada to Emerging International Economies


‐2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

2000 2001 2002 2003 2004 2005 2006

% Change

Brazil Canada China India Mexico Russia South Korea With the exception of Mexico (in 2001), each of these economies have posted levels of growth over the last six years. In 2006, Canada placed last amongst each of these nations in terms of growth.

45 These listings include Goldman Sachs BRIMC, G8+5, Next 11, Asian Tigers, and G‐20. 46 “Real GDP (2000 dollars) Historical”, United States Department of Agriculture Economic Research Service. 19 December 2007 <http://www.ers.usda.gov/data/macroeconomics/>

77

Figure 4.28 displays the GDP’s of Canada and the “emerging” economies.

Figure 4.28: Canada and Emerging International Economies GDP

(GDP in Constant 2000 U.S. Dollars)47

$602

$610

$621

$625 $655

$670

$694

$714

$727

$752

$767

$789 $826 $852

$1,199 $1,298 $1,416 $1,558 $1,715

$1,888

$2,075

$457.37

$480.93

$500.61

$543.69

$581.22

$630.22

$680.64

$581

$581

$585

$594 $619

$643 $668

$260

$273

$286

$307

$329

$350

$371

$512

$531 $568

$586 $613

$637 $672

$0$100$200$300$400$500$600$700$800$900

$1,000$1,100$1,200$1,300$1,400$1,500$1,600$1,700$1,800$1,900$2,000$2,100$2,200

2000 2001 2002 2003 2004 2005 2006

$US Billions (2000)

Brazil Canada China India Mexico Russia South Korea Although Canada had a slower growth rate compared to the emerging economies, it also had a greater GDP (with the exception of China). When compared to the other emerging nations, China’s GDP would appear to be better suited among the “traditional” economies. To better understand these emerging economies, outlines have been included which detail current and historic trade with Canada and summaries regarding the development and marketing of these countries.

47 “Real GDP (2000 dollars) Historical”, United States Department of Agriculture Economic Research Service. 19 December 2007 <http://www.ers.usda.gov/data/macroeconomics/>

78

Brazil

Imports (To Canada)

2006

Rank 2006

Rank 2005

GrowthExports

(From Canada) 2006

Rank 2006

Rank 2005

Growth

Value $ $3,406,890,549 13 13 5.92% $1,337,777,044 17 17 18.64% Weight (kg) 9,107,223,909 5 8 42.51% 5,750,039,997 10 11 ‐6.30%

With the tenth largest economy in the world, Brazil is viewed as an emerging market that may become a world power4849. As the world’s fifth largest country and fifth largest population, Brazil represents the largest market in South America. Currently, Brazil is a major exporter of agricultural products, livestock, and raw materials (timber and minerals). In addition, Brazil has begun to develop and expand manufacturing capabilities in a variety of industries, such as automotive, aviation, and chemical. Figure 4.29 displays the annual rate of change (growth) between the value of Canadian imports from Brazil and the value of Canadian exports to Brazil.

Figure 4.29: Rate of Change, Canadian Exports & Imports To/From Brazil‐ Value

13

13

15

16

14

17

17

17

17

17

16

16

‐25.00%

‐15.00%

‐5.00%

5.00%

15.00%

25.00%

35.00%

2001 2002 2003 2004 2005 2006

% Change


48 World Bank, Based on GDP 2006, http://siteresources.worldbank.org/DATASTATISTICS/Resources/GDP.pdf 49 In 2006, Canada was ranked as the world’s fourteenth largest economy by the World Bank.

79

Imports (Value): In 2006, Canada imported over $3.4 billion worth of goods from Brazil. This included a variety of agricultural products (e.g. sugar cane [8% of total import value], orange juice [3%], coffee beans [2%]), raw materials (e.g. aluminum oxide [10%], iron, gold, aluminum), and manufactured items such as aircraft, engines, automobile parts, and industrial equipment. Exports (Value): In 2006, Canada exported over $1.3 billion worth of goods to Brazil. High valued Canadian commodities included mineral resources (e.g. potassium chloride [16%], coal [15%], sulfur, nickel), agricultural products (e.g. wheat, canary seed, linseed, malt, lentils, etc.), raw materials (for further processing) (e.g. newsprint [14%], telephone line, copper wire, piping, aircraft and automotive parts), and industrial equipment such as rail locomotives, aircraft, flight simulators, and motorboats. The 2006 distribution of Canadian exports by province to Brazil is listed below in Figure 4.30.

Figure 4.30: Province of Origin, Canadian Exports to Brazil‐ Value

($ Millions)

$0.5$1.0$47.4

$1.2

$67.1

$364.2$314.1

$13.1

$175.3

$97.2

$256.8

$0.0

$50.0$100.0

$150.0$200.0

$250.0

$300.0$350.0

$400.0

British Columbia

Alberta

Saskatchewan

Manitoba

Ontario

Quebec

New Brunswick

Prince Edward Is.

Nova Scotia


Nunavut

$ Millions

The majority of Brazilian bound exports originated in Quebec (27%), Ontario (23%), British Columbia (19%), and Saskatchewan (13%).

80


Figure 4.31: Region of Origin, 2000‐2006 Canadian Exports to Brazil‐ Value

($ Millions 2006)

$520.7 $472.2 $411.4 $518.9 $495.4 $477.1 $542.4

$559.0 $435.6 $328.0$362.0 $381.6 $541.6 $678.3

$201.5 $184.1 $125.2 $95.9 $131.0 $108.9 $116.7$0.5$0.1$0.1$0.1$0.0$0.0$0.0

0%

20%

40%

60%

80%

100%


The distribution of Canadian exports to Brazil (by value) has fluctuated since 2000. In 2003, the majority of exports originated in the Western provinces. This has since declined and the majority of exports now originate in Quebec and Ontario. Figure 4.32 displays the annual rate of change (growth) between the total weight of Canadian imports from Brazil and the total weight of Canadian exports to Brazil.

Figure 4.32: Rate of Change, Canadian Exports & Imports To/From Brazil‐ Weight

12

9 8

7

8

5

1010

11

10

1110

‐20.00%

‐10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

2001 2002 2003 2004 2005 2006

% Change


Imports (Weight): In 2006, the total weight of imports from Brazil was over 9.1 billion kilograms. Heavy commodity imports included industrial equipment (e.g. diesel transformers {35%}), minerals and metals (e.g. aluminum ores {18%} and oxide {10%}, pig iron, building stone, etc.), agricultural goods (e.g. sugar cane {11%}, orange juice, coffee beans), automotive parts, and lumber (wood).

81

Exports (Weight): In 2006, the total tonnage of Canadian exports to Brazil was over 5.7 billion kilograms. Heavy Canadian exports included fuels and minerals (e.g. coal [28%], potassium chloride [20%], sulfur, ammonium sulphate, etc.), newsprint, and agricultural goods (e.g. wheat, canary seed, malt, linseed, lentils). The distribution of Canadian exports by province to Brazil is listed below in Figure 4.33.

Figure 4.33: Province of Origin, Canadian Exports to Brazil‐ Weight

(Millions kg)

0.001

1,888.14

563.81

890.56

28.52 101.69

1,758.92

382.24

1.38 55.47 79.31

0.00200.00400.00600.00800.001,000.001,200.001,400.001,600.001,800.002,000.00

British Columbia

Alberta

Saskatchewan

Manitoba

Ontario

Quebec

New Brunswick

Prince Edward Is.

Nova Scotia


Nunavut

KG Millions

The majority of Canadian exports (based on weight) originated in British Columbia (33%), Quebec (31%), Saskatchewan (15%), and Alberta (10%). This is fairly proportional to the value of Canadian exports, though there are two exceptions. The first of these is in Ontario, where 23% of the total value of Canadian exports only accounted for 2% of the total weight of exports. The other exception is in British Columbia, where one third of the weight of Canadian exports accounted for less than one fifth of the total value. The historic distribution of Canadian exports by geographic region is displayed in Figure 4.34.

Figure 4.34: Region of Origin, 2000‐2006 Canadian Exports to Brazil‐ Weight

(Millions kg)

3,269.1 3,028.5 2,687.63,527.4

3,472.5 3,290.1 3,371.0

2,755.7 3,135.6 2,341.81,046.4

2,175.7 2,461.8 1,860.6

657.1 542.9 542.1 596.6 507.8 384.5 518.40.0 0.0 0.0 0.0 0.0 0.0 0.0

0%

20%

40%

60%

80%

100%


Unlike the value of Canadian exports, since 2003, the majority of the total weight of Canadian exports to Brazil continues to originate from the Western provinces.

82

China

Imports (To Canada)

2006

Rank 2006

Rank2005

GrowthExports

(From Canada) 2006

Rank 2006

Rank2005

Growth

Value $ $34,473,135,417 2 2 14.25% $7,660,330,865 4 4 6.12% Weight (kg) 12,969,382,176 2 3 13.23% 21,721,982,182 4 3 ‐17.17%

One of the oldest civilizations on Earth, China is the most populous country in the world. After transitioning it’s economy from a centrally planed model to a market driven system, China now represents the world’s fourth largest economy50 (based on GDP), and second largest purchasing power parity (PPP)51. China is a competitive manufacturer and processor in the world markets. Low human capital costs allow China to thrive as a cheap source of labor to other countries. At the same time, China participates in the development and manufacturing of technology. Figure 4.35 displays the annual rate of change (growth) between the value of Canadian imports from China, and the value of Canadian exports to China.

Figure 4.35: Rate of Change, Canadian Exports & Imports To/From China‐ Value

3

2

2

2 224

4

4

4

44

‐10.00%

‐5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

2001 2002 2003 2004 2005 2006

% Change

Imports Exports Import Rank

Export Rank

50 World Bank, Based on GDP 2006; <http://siteresources.worldbank.org/DATASTATISTICS/Resources/GDP.pdf> 51 World Bank, Based on PPP GDP 2006, <http://siteresources.worldbank.org/DATASTATISTICS/Resources/GDP_PPP.pdf>

83

Imports (Value): In 2006, Canada imported over $34.4 billion worth of goods from China. This included a variety of electronic and computer equipment (e.g. laptops, televisions, radios, video games, etc.), engines, furniture and appliances, toys, and clothing. Imports from China represent a diverse variety of industries and products. The largest segment of these imports is only 5% (Portable computers weighing less than 10 kg). Yet, given the level of trade between Canada and China, a segment representing less than 1% of total imports is still worth over $100 million. Exports (Value): In 2006, China was Canada’s fourth largest export destination. Over $7.6 billion worth of goods were sent to China. The majority of Canada’s exports were raw materials or products that could be further processed or “applied” to other manufactured items. The largest valued export to China was ethylene glycol, a chemical that can be used as a coolant, antifreeze, and as a component in the manufacturing of plastic. This represented approximately 11% of Canada’s total exports to China. Other major exports included metals and minerals (e.g. nickel (8%), copper (6%), iron, sulphur, potassium chloride, etc.), forestry products, agricultural products (e.g. barley (1%), dried peas, wheat, etc.), and manufacturing equipment. Figure 4.36 displays the value of Canada’s exports to China by the province of origin.

Figure 4.36: Province of Origin, Canadian Exports to China‐ Value

($ Millions)

$32.0 $0.6$6.7

$412.5

$89.9$5.8$36.6

$886.7

$1,625.9

$352.1$488.1

$2,195.0

$1,528.5

$0.0

$500.0

$1,000.0

$1,500.0

$2,000.0

$2,500.0

British Columbia

Alberta

Saskatchewan

Manitoba

Ontario

Quebec

New Brunswick

Prince Edward Is.

Nova Scotia


Yukon

Northwest Terr.

Nunavut

$ Millions

The majority of Canada’s exports to China (by value) originated in Alberta (29%), Ontario (21%), and British Columbia (20%).

84


Figure 4.37: Region of Origin, 2000‐2006 Canadian Exports to China‐ Value

($ Millions 2006)

$2,739.5 $2,895.3 $2,464.9 $2,697.7$4,494.5 $4,447.3 $4,563.7

$1,367.8 $1,804.4$1,900.6 $2,100.0

$2,101.9 $2,231.6 $2,512.6

$544.8$534.3$402.1$405.6$295.7$163.8$153.9$3.5 $0.0 $0.0 $0.5 $0.5 $5.3 $39.2

0%

20%

40%

60%

80%

100%


Since 2000, the majority of the total value of Canadian exports has originated from the Western provinces. In 2005, the share of China bound exports that originated in the West began to decrease. The decreasing market share continued in 2006, falling to 59.6% of Chinese exports from 61.6%. The lost market share appears to have shifted to the Eastern provinces, which increased to 32.8% from 30.9% of Chinese exports. Annual exports to China from the northern Territories have annually amounted to less than 1% of total exports. Figure 4.38 displays the rate of change in the weight of Canadian exports and Chinese imports in 2006.

Figure 4.38: Rate of Change, Canadian Exports & Imports To/From China‐ Weight

88

6

6

3

2

67

6

4

3

4

‐30.00%

‐20.00%

‐10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

2001 2002 2003 2004 2005 2006

% Change


85

Imports (Weight): In 2006, Canada imported nearly 13 billion kilograms of goods from China. These imports included industrial machinery (e.g. heat exchangers (5%), heat pumps, electric transformers, etc.), automotive parts, electronics equipment, clothing, and building materials. The value that heat exchanges represent (5%) is the largest single segment of Canadian imports (by weight). This is due to the diversity and variety of items that Canada imports annually from China. Exports (Weight): In 2006, the total weight of Canadian exports to China declined to 12.7 billion kilograms from 2005. Since 2003, the total weight of Canadian exports bound for China has increased annually. Though growth slowed in 2005, this was the first year that posted a negative growth since 2002. When classified by weight, the majority (54%) of exports were based on three categories of commodities. These were sulphur (15%), iron ores (17%), and low value exports and confidential commodities (22%). Figure 4.39 displays the weight of Canada’s exports to China by the province of origin.

Figure 4.39: Province of Origin, Canadian Exports to China‐ Weight

(Millions kg)

2.30 0.23

2,521.61

5,352.75

2,242.75

272.67907.27

6,068.87

49.07 1.05 103.76

4,199.03

0.610.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00

British Columbia

Alberta

Saskatchewan

Manitoba

Ontario

Quebec

New Brunswick

Prince Edward Is.

Nova Scotia


Yukon

Northwest Terr.

Nunavut

KG Millions

In 2006, the majority of Canadian exports, by weight, to China originated in Quebec (28%) and Alberta (25%). The weights of the exports are somewhat disproportional to the values when categorized by the province of origin. While Quebec exports made-up 28% of the total weight, they only accounted for 12% of the total value of Canadian exports. Similarly, Newfoundland accounted for 19% of the total weight and only 5% of the total value. At the other end of the spectrum, Ontario exports only made up 4% of the total weight, yet were worth 21% of the total value, while exports from British Columbia accounted for 12% of total weight and 20% of total value.

86

The historic distribution of Canadian exports by geographic region in displayed in Figure 4.40.

Figure 4.40: Region of Origin, 2000‐2006 Canadian Exports to China‐ Weight

(Millions kg)

7,003.0 7,096.35,377.9 6,251.2

12,216.513,369.4 10,389.8

2,599.2 1,700.13,073.9

4,052.36,080.2

8,831.56,976.1

833.9 2,077.3 2,221.6 4,023.2 4,352.90.1

659.8722.93.10.412.5 0.0 0.0 0.0

0%

20%

40%

60%

80%

100%


For the first time in the decade, less than half of the total weight of Canadian exports to China originated in the Western provinces (47.8%). Although this is still the greatest percentage of exported weight, previous years have seen the West produce the majority of the weight of China bound exports. The market share appears to have shifted from the West to the Atlantic, which increased from 15.3% of exports in 2005, to 20.0% of exports in 2006.

India

Imports (To Canada)

2006

Rank 2006

Rank 2005

GrowthExports

(From Canada) 2006

Rank 2006

Rank 2005

Growth

Value $ $1,917,955,992 22 24 4.93% $1,671,696,010 14 18 51.90% Weight (kg) 608,328,568 40 29 ‐21.19% 4,295,359,297 13 13 ‐5.84%

Despite high levels of poverty and illiteracy, India is emerging as a world leading “knowledge based” economy. Overall, India has the world’s second largest workforce after China.52 With a wide scope of education levels, India is able to participate in a variety of industries including technology and software, manufacturing, and agriculture.

52 “Rank Order ‐ Labor force”, The World Factbook. Central Intelligence Agency. 13 December, 2007 <https://www.cia.gov/library/publications/the‐world‐factbook/rankorder/2095rank.html>

87

http://en.wikipedia.org/wiki/The_World_Factbook

Figure 4.41 displays the annual rate of change (growth) between the value of imports arriving from India, and the value of Canadian exports to India.

Figure 4.41: Rate of Change, Canadian Exports & Imports To/From India‐ Value

22

242122

23

23

14

18

1818

18

19

‐15.00%

‐5.00%

5.00%

15.00%

25.00%

35.00%

45.00%

55.00%

65.00%

2001 2002 2003 2004 2005 2006

% Change

Imports Exports Import Rank Export Rank Imports (Value): In 2006, the level of import (value) growth from India declined, though the overall value remained positive and growing. In total, Canadian imports from India were valued at over $1.9 billion. Despite the decline in the growth level of imports, India advanced two positions to rank as Canada’s 22nd import trading partner (by value). Imports from India included clothing and jewelry, petroleum and fossil fuels, automotive parts, and housewares. Exports (Value): Historically, the trade activity in terms of value between Canada and India almost appears to be inverse, though the value of Canadian imports continued to grow. This changed in 2006 with a dramatic increase in growth (51.9%) in the value of exports to India. Overall, the value of Canadian exports to India was valued at over $1.7 billion. Major exports (in terms of value) to India included agricultural goods (e.g. wheat, peas, lentils, etc.), timber and forestry products (e.g. newsprint), minerals (e.g. copper, nickel), and aircraft.

88

The distribution of Canadian exports by province to India are listed below in Figure 4.42.

Figure 4.42: Province of Origin, Canadian Exports to India‐ Value

($ Millions)

$0.003 $0.01$21.6$11.4

$60.9

$4.3

$57.6

$239.7$237.3

$152.7

$376.0

$160.4

$349.7

$0.0$50.0

$100.0$150.0$200.0

$250.0$300.0

$350.0$400.0

British Columbia

Alberta

Saskatchewan

Manitoba

Ontario

Quebec

New Brunswick

Prince Edward Is.

Nova Scotia


Yukon

Northwest Terr.

Nunavut

$ Millions

The greatest level of exports to India is from Saskatchewan and British Columbia. This reflects India’s demand for agriculture and forestry products. The historic distribution of Canadian exports by geographic region is displayed in Figure 4.43.

Figure 4.43: Region of Origin, 2000‐2006 Canadian Exports to India‐ Value

($ Millions 2006)

$326.6$510.7

$395.3 $388.3 $430.3 $578.7$1,038.8

$295.5$224.6

$319.0$357.1 $390.2 $414.1

$477.0

$89.3 $105.6 $99.8 $134.3$47.3$36.3$23.1$21.6$7.8$0.1$0.0$0.0 $0.0 $0.1

0%

20%

40%

60%

80%

100%


Since 2000, the Western region of Canada has supplied the greatest percentage of value based exports to India. In 2006, the share of western exports increased greatly from the previous year (52.6% to 62.1%), while exports from the Eastern region decreased (from 37.6% to 28.5%). Although the percentage of Eastern exports has been decreasing, the value of these exports has been increasing. The share of exports originating from the Territories nearly doubled in 2006 from the previous year (1.3% in 2006 from 0.7% in 2005), while the dollar value nearly tripled ($21.6 million in 2006 from $7.8 million in 2005).

89

Figure 4.44 displays the annual rate of change (growth) between the total weight of Canadian imports from India and the total weight of Canadian exports to India.

Figure 4.44: Rate of Change, Canadian Exports & Imports To/From India‐ Weight

40

2935

43

44

37

13

13

16

17

23

21

‐75.00%

‐50.00%

‐25.00%

0.00%

25.00%

50.00%

75.00%

100.00%

125.00%

150.00%

2001 2002 2003 2004 2005 2006

% Change

Imports Exports Import Rank Export Rank Imports (Weight): In 2006, the weight of imports from India decreased significantly. India shifted in ranking as Canada’s 29th largest trading partner to 40th (by weight). This occurred despite an increase in the value of imports. In 2006, major imports from India included fossil fuels, rice, housewares, and stone. Exports (Weight): From 2001‐2005, the inverse nature of trade (by weight) between Canada and India was visible. However, trade continued to increase. The growth levels in exports to India appear more erratic, with larger fluctuations in the level of growth from year to year. In 2006, the growth level of exports to India was negative (‐5.8%). Major exports to India included agricultural products (e.g. wheat, peas, lentils, etc.), timber and forestry products, and industrial equipment.

90

The distribution of Canadian exports to India by province is listed below in Figure 4.45.

Figure 4.45: Province of Origin, Canadian Exports to India‐ Weight

(Millions kg)

0.00010.05

415.88 448.48

1,962.06

234.21

654.91363.70

116.55 2.59 81.42 15.50 0.000020

500

1,000

1,500

2,000

2,500

British Columbia

Alberta

Saskatchewan

Manitoba

Ontario

Quebec

New Brunswick

Prince Edward Is.

Nova Scotia


Yukon

Northwest Terr.

Nunavut

KG Millions

In terms of weight, nearly half of all Canadian exports to India originate from Saskatchewan. The combined weights of the next largest exporters (Ontario, Alberta, and British Columbia) are still less than that of Saskatchewan. This is due to the high level of agricultural exports bound for India. The historic distribution of Canadian exports by geographic region is displayed in Figure 4.46.

Figure 4.46: Region of Origin, 2000‐2006 Canadian Exports to India‐ Weight

(Millions kg)

808.2 1,089.1 819.0 1,147.1 1,295.1

1,856.8

3,060.6

219.0 209.4 161.5287.0 461.3

2,562.3

1,018.6

146.2 216.124.7 35.5 65.5 152.0 142.00.0 0.0 0.2 0.0 0.1 0.6 0.0

0%

20%

40%

60%

80%

100%


In 2006 the overwhelming majority of Canadian export tonnage to India originated from the Western provinces (71.3%). The percentage of exports originating from the Eastern region decreased in 2006 to 23.7% from 56.2% in 2005. In 2005, over 2 billion kilograms of printing machinery was exported from Ontario. This was the cause of the surge in Eastern based exports in 2005, which resulted in the decrease from 2006.

91

Mexico

Imports (To Canada)

2006

Rank 2006

Rank 2005

GrowthExports

(From Canada) 2006

Rank 2006

Rank 2005

Growth

Value $ $15,982,138,378 3 3 7.18% $4,379,239,555 5 5 32.13% Weight (kg) 5,773,080,035 7 9 8.79% 5,406,971,198 11 6 ‐65.05%

Following an economic crisis with the devaluation of the peso in 1994, Mexico has adjusted and recovered to become an emerging world economy. The Mexican economy is diversified throughout a variety of different sectors including agriculture, manufacturing, chemical, mining, and tourism. Mexico maintains free trade agreements with over forty nations, including Canada under the North American Free Trade Agreement (NAFTA).53 Figure 4.47 displays the annual rate of change (growth) between the value of Canadian imports from Mexico and the value of Canadian exports to Mexico.

Figure 4.47: Rate of Change, Canadian Exports & Imports To/From Mexico‐ Value

4

3 3 34

7

6

6

6

5 5

5

-60.00%

-40.00%

-20.00%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

2001 2002 2003 2004 2005 2006

% C

hang

e

Imports Exports Import Rank Export Rank Imports (Value): In 2006, Canada imported nearly $16 billion worth of goods from Mexico. This was an increase of 7.2% from 2005. High valued imports from Mexico included electronics, automobiles and automobile parts, fossil fuels, and clothing.

53 “Economy‐ Mexico”, The World Factbook. Central Intelligence Agency. 6 March, 2008 <https://www.cia.gov/library/publications/the‐world‐factbook/geos/mx.html>

92

http://en.wikipedia.org/wiki/The_World_Factbook

Exports (Value): In 2006 the growth level of exports to Mexico (32.13%) surpassed that of Mexican imports to Canada. In total, over $4.3 billion worth of goods were exported to Mexico. Major valued commodities among these exports included agricultural products, automobiles and automobile parts, processed livestock, petroleum and fossil fuels, timber and forestry products, and plastics. The distribution of Canadian exports by province to Mexico is listed in Figure 4.48.

Figure 4.48: Province of Origin, Canadian Exports to Mexico‐ Value

($ Millions)

$0.3$0.003 $0.3$21.7$34.1$2.4$20.5

$737.5

$2,192.1

$232.6$315.7$628.8

$193.2

$0.0

$500.0

$1,000.0

$1,500.0

$2,000.0

$2,500.0

British Columbia

Alberta

Saskatchewan

Manitoba

Ontario

Quebec

New Brunswick

Prince Edward Is.

Nova Scotia


Yukon

Northwest Terr.

Nunavut

$ Millions

Approximately 50% of the total value of exports destined for Mexico originated in Ontario. Other major export origins included Quebec (17%), Alberta (14%), Saskatchewan (7%), and Manitoba (5%). Figure 4.49 displays the historic distribution of Canadian exports by geographic region.

Figure 4.49: Region of Origin, 2000‐2006 Canadian Exports to Mexico‐ Value

($ Millions 2006)

$894.0 $1,166.7 $1,027.1 $1,021.3 $1,561.6$1,291.8 $1,370.3

$1,398.9 $1,895.0 $1,623.8 $1,324.5$1,544.2

$1,962.4 $2,929.6

$78.7$59.9$42.4$69.2$78.5$53.5 $80.0$0.6$0.3$0.4$0.2$0.0$0.0$0.0

0%

20%

40%

60%

80%

100%


93

In 2006, the majority of the value of Canadian exports to Mexico originated from the Eastern region (66.9%). Overall, the Atlantic provinces accounted for less than 2% of total value of Mexican exports while the Territories accounted for less than 0.1%. Both of these figures remain consistent from previous years. The annual rate of change (growth) between the weight of Canadian imports from Mexico and the weight of Canadian exports to Mexico is displayed in Figure 4.50.

Figure 4.50: Rate of Change, Canadian Exports & Imports To/From Mexico‐ Weight

6

7

7 119

713

15

1412

6

11

-75.00%-50.00%-25.00%

0.00%25.00%50.00%75.00%

100.00%125.00%150.00%175.00%200.00%225.00%250.00%275.00%300.00%

2001 2002 2003 2004 2005 2006

% C

hang

e

Imports Exports Import Rank Export Rank Imports (Weight): In 2006, over 5.7 billion kilograms of goods were imported from Mexico. This was an increase of 8.7% from 2005. Mexico continued to increase it’s placing among Canadian import trading partners by weight to seventh. Major weight based imports included fossil fuels, salt, industrial machinery, automobiles and automobile parts, fruits and vegetables, and electronics. Exports (Weight): In 2006, the total weight of exports destined for Mexico decreased by 65% to 5.4 billion kilograms (previously 15.4 billion kilograms in 2005). Visually, this negative growth is depicted sharply as the previous years growth was nearly 270%. Despite the decrease in weight, the total value of exports to Mexico increased. Major weight based exports included agricultural products, industrial machinery, sheet metal, automobiles and automobile parts, timber and forestry products, and fossil fuels.

94

The distribution of Canadian exports by province to Mexico is listed in Figure 4.51.

Figure 4.51: Province of Origin, Canadian Exports to Mexico‐ Weight

(Millions kg)

0.15

435.11

1,180.90 1,154.76

648.34

895.10

416.11

627.64

2.04 17.20 29.54 0.070.00040.00

200.00

400.00

600.00

800.00

1,000.00

1,200.00

1,400.00

British Columbia

Alberta

Saskatchewan

Manitoba

Ontario

Quebec

New Brunswick

Prince Edward Is.

Nova Scotia


Yukon

Northwest Terr.

Nunavut

KG Millions

While the majority of the total value of Mexican bound Canadian exports originated in Ontario, the weight of these goods was spread out across several provinces. The greatest contributor of weight was Alberta (21%), followed closely by Saskatchewan (21%). Other major provincial origins of high weight exports included Ontario (17%), Manitoba (12%), and New Brunswick (12%). The historic distribution of Canadian exports by geographic region is displayed in Figure 4.52.

Figure 4.52: Region of Origin, 2000‐2006 Canadian Exports to Mexico‐ Weight

(Millions kg)

2,832.7 2,864.8 1,952.9 2,445.73,604.7

2,912.1

3,419.1

406.5 507.1518.3

512.3

12,472.9

1,311.2

414.6 300.1 295.0 676.40.0 0.2

493.084.085.3220.40.00.10.00.00.0

0%

20%

40%

60%

80%

100%


In 2005, Ontario exported over 11 billion kilograms of industrial machinery to Mexico. This accounted for the majority of the 12.5 billion kilograms that originated from the Eastern region that year. Although, the Eastern percentage of export tonnage was lower in 2006 (24.3%) than it was in 2005 (80.6%), the percentage of exports and tonnage amount (1.3 billion kilograms) was greater than it had been prior to 2005. In 2006, the majority of the weight of Mexican bound exports originated from the Western provinces (63.2%). This was an increase from the previous year in both the percentage of Mexican exports (18.8% in 2005) and the tonnage amount (3.4 billion kilograms in 2006, up from 2.9 billion kilograms in 2005).

95

Russia

Imports (To Canada)

2006

Rank 2006

Rank 2005

GrowthExports

(From Canada)2006

Rank 2006

Rank 2005

Growth

Value $ $1,382,477,925 31 24 ‐21.81% $870,140,832 21 24 51.27% Weight (kg) 3,109,854,548 13 13 ‐12.13% 409,790,920 48 46 19.98%

Following the end of communist rule and the breakup of the Soviet Union, Russia emerged only to struggle with market based economies. Recently, progress has been made and the country is emerging as a potential economic leader. As the world’s largest country by geographic area, Russia possesses a considerable supply of natural resources. Figure 4.53 displays the annual rate of change (growth) between the value of Canadian imports from Russia and the value of Canadian exports to Russia.

Figure 4.53: Rate of Change, Canadian Exports & Imports To/From Russia‐ Value

41

41

35

23

24

31

37

40

31

30

24

21

-60.00%

-40.00%

-20.00%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

2001 2002 2003 2004 2005 2006

% C

hang

e

Imports Exports Import Rank Export Rank Imports (Value): In 2006, Canadian imports of Russian products were worth $1.3 billion. This was a decline of over 20% from 2005. Due to this negative growth, Russia was ranked as Canada’s 31st import partner based on value. Though the growth of imports has slowed since 2003, this is the first occasion since 2001 where total value of imports declined. Major value imports from Russia included fossil fuels, vodka, industrial metals, aircraft and aircraft parts, and seafood. Exports (Value): In 2006, Canadian exports to Russia increased by 51.2% from 2005 to a value worth over $870 million. Since 2002, Russia’s ranking among other nations as a Canadian export destination has increased from 40th to 21st. Major exports to Russia included processed livestock, farming machinery, transportation equipment, aircraft and aircraft parts, and seafood.

96

Figure 4.54 displays the value of Canada’s exports to Russia by the province of origin.

Figure 4.54: Province of Origin, Canadian Exports to Russia‐ Value

($ Millions)

$0.6 $0.1

$37.6$18.8

$0.7$1.3

$225.5

$275.7

$59.6$34.6

$166.0

$49.6

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

British Columbia

Alberta

Saskatchewan

Manitoba

Ontario

Quebec

New Brunswick

Prince Edward Is.

Nova Scotia


Northwest Terr.

Nunavut

$ Millions

Of the $870 million worth of goods exported to Russia in 2006, the majority originated in Ontario (32%), Quebec (26%), and Alberta (19%). The historic distribution of Canadian exports by geographic region is displayed in Figure 4.55.

Figure 4.55: Region of Origin, 2000‐2006 Canadian Exports to Russia‐ Value

($ Millions)

$87.4 $128.2 $105.3$112.6 $130.6 $215.6 $309.8

$140.6 $188.4 $156.4$239.9 $282.6 $328.5 $501.3

$58.5$31.0$22.5$12.1$8.5$14.4$3.8$0.6$0.1$0.1$0.0$0.0$0.0$0.0

0%

20%

40%

60%

80%

100%


The majority of the value of Russian bound exports originated in the Eastern region of Canada in 2006 (57.6%). Although the total dollar value of exports from this region increased from the previous year, the proportion of total exports remained unchanged (57.1% in 2005). Since 2003, the percentage of exports from the Atlantic provinces has been increasing, while the percentage of Western exports has been fluctuating. Goods from the Territories have always accounted for less than 1% of the total value of Canadian Exports to Russia.

97

Figure 4.56 displays the annual rate of change (growth) between the weight of Canadian imports from Russia and the weight of Canadian exports to Russia.

Figure 4.56: Rate of Change, Canadian Exports & Imports To/From Russia‐ Weight

25

29

15

15

1313

65

58

49

52

4648

-150.00%

-100.00%

-50.00%

0.00%

50.00%

100.00%

150.00%

200.00%

250.00%

300.00%

2001 2002 2003 2004 2005 2006

% C

hang

e

Imports Exports Import Rank Export Rank Imports (Weight): In 2006, Canada imported over 3.1 billion kilograms of goods from Russia. This was a decrease of 12.13% from 2005. Despite this decrease, Russia remained Canada’s 13th weight‐based import partner. Some of the major imports included fossil fuels, processed metals, raw metals, vodka, and seafood. Exports (Weight): In 2006, the total weight of Canadian goods exported to Russia was nearly 410 million kilograms. Although this was an increase of 19.9%, Russia’s ranking as a Canadian export destination decreased from 46th to 48th. Large weight-based Canadian exports included processed livestock, seafood, farming machinery, transportation equipment and agricultural products.

98

Figure 4.57 displays the weight of Canada’s exports to Russia by the province of origin.

Figure 4.57: Province of Origin, Canadian Exports to Russia‐ Weight

(Millions kg)

0.03 0.0312.4810.41

0.190.35

90.4592.31

17.3713.97

154.80

17.39

020406080100120140160180

British Columbia

Alberta

Saskatchewan

Manitoba

Ontario

Quebec

New Brunswick

Prince Edward Is.

Nova Scotia


Northwest Terr.

Nunavut

KG Millions

Canada’s major contributors of weight based exports to Russia were Alberta (38%), Ontario (23%), and Quebec (22%). Figure 4.58 displays the historic distribution of Canadian exports by geographic region.

Figure 4.58: Region of Origin, 2000‐2006 Canadian Exports to Russia‐ Weight

(Millions kg)

17.4 24.9 24.924.0

139.6 217.4203.5

48.7 61.6 73.6184.3

74.8 112.6182.8

9.2 14.90.023.411.611.32.21.60.10.00.00.00.00.0

0%

20%

40%

60%

80%

100%


In 2006, nearly half of the total weight of Russian bound exports originated from the Western region (49.6%). This was a decrease from the previous year in both the percentage of the total weight of exports (63.6% in 2005) and the total tonnage (‐13.8 million kilograms). The tonnage of goods originating from the Eastern region increased in 2006 both in terms of share (44.6%) and weight (182 million kilograms).

99

South Korea

Imports (To Canada)

2006

Rank 2006

Rank2005

GrowthExports

(To Canada) 2006

Rank 2006

Rank 2005

Growth

Value $ $5,762,891,232 7 8 5.11% $3,266,324,301 7 7 13.82% Weight (kg) 1,549,063,990 17 17 25.12% 14,824,067,905 6 6 15.86%

Following the end of the Korean conflict, South Korea has evolved as a world economy. With a knowledge based economy focused on technology and manufacturing, South Korea has a high level of demand for raw materials. Figure 4.59 displays the annual rate of change (growth) between the value of Canadian imports from South Korea and the value of Canadian exports to South Korea.

Figure 4.59: Rate of Change, Canadian Exports & Imports To/From South Korea‐ Value

7

8

77

9

9

7

7

8

8

7

8-20.00%

-15.00%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

2001 2002 2003 2004 2005 2006

% C

hang

e

Imports Exports Import Rank Export Rank Imports (Value): Initially in 2001, Canadian trade with South Korea moved in a parallel manor (though the rate of change by Canadian imports was greater). In 2004, trade between the two countries appeared to have adjusted into an inverse pattern. Overall, the value of Canadian imports has remained greater than the value of South Korean bound exports. In 2006, major value based imports from South Korea included automobiles and automobile parts (over 20% of total value), communications equipment, electronic equipment, and circuitry.

100

Exports (Value): In 2004, the level of growth of exports to South Korea surpassed the growth level of Canadian imports. Following a peak of 20.2% in 2005, the growth level of South Korean imports to Canada decreased to 13.8% in 2006. Although the rate of growth slowed, the total value of exports to South Korea was at a high of $3.2 billion. Major commodities, by value, bound for South Korea include fossil fuels, minerals (e.g. copper, nickel, aluminum, etc.), timber and forestry products, agricultural products (e.g. wheat, potatoes, etc.), and processed livestock. The distribution of Canadian exports by province to South Korea is listed in Figure 4.60.

Figure 4.60: Province of Origin, Canadian Exports to South Korea‐ Value

($ Millions)

$0.1

$1,380.2

$436.8

$95.6 $80.8

$702.0

$488.7

$29.5 $4.3 $30.6 $17.7 $0.1$0.0

$200.0$400.0$600.0

$800.0$1,000.0$1,200.0$1,400.0$1,600.0

British Columbia

Alberta

Saskatchewan

Manitoba

Ontario

Quebec

New Brunswick

Prince Edward Is.

Nova Scotia


Northwest Terr.

Nunavut

$ Millions

The largest percentage of goods destined for South Korea originated in British Columbia (42%). Other major exporters included Ontario (21%), Quebec (15%), and Alberta (13%). Figure 4.61 displays the historic distribution of Canadian exports by geographic region.

Figure 4.61: Region of Origin, 2000‐2006 Canadian Exports To South Korea‐ Value

($ Millions 2006)

$2,015.8 $1,639.4 $1,592.8 $1,394.5 $1,573.1 $1,990.3$1,993.3

$620.2 $588.9 $595.0 $607.4 $720.4 $797.1$1,190.7

$82.1$93.3$112.6$86.9$72.2$59.4 $82.3$0.2$0.0$0.0$0.2$0.0$0.0 $0.1

0%

20%

40%

60%

80%

100%


101

The majority of the total value of Canadian exports to South Korea has originated from the Western region (approximately 61.0%). However, the total proportion of exports from the West has been declining since 2000 (74.8%), with the exception of an increase in 2005 (69.35%). The proportion of the total value of exports from the Eastern region has been increasing since 2002 (approximately 26.2% in 2002, approximately 36.5% in 2006), with the exception of a slight decrease in 2005 (27.8%). In the last decade, Atlantic exports have fluctuated between 2% to 5% of the total value of Canadian exports to South Korea. The annual rate of change (growth) between the total weight of Canadian imports from South Korea and the total weight of Canadian exports to South Korea is displayed in Figure 4.62.

Figure 4.62: Rate of Change, Canadian Exports & Imports To/From South Korea‐ Weight

22

17

2519

16

21

8

9

8

7

8

6

‐30.00%

‐20.00%

‐10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

2001 2002 2003 2004 2005 2006

% Change

Imports Exports Import Rank Export Rank Imports (Weight): The rate of change in the weight of imports and exports between Canada and South Korea follows a similar pattern to the rate of change by value of these two nations. Initially, between 2001‐2003, trade flows were parallel in terms of growth. Between 2004 and 2005 the growth levels adjusted from a parallel to inverse fashion. In 2006, the growth level of imports to Canada from South Korea increased by 25.1% from 2005, totaling over 1.5 billion kilograms. Major weight based imports included automobiles and automobile parts, electronic equipment, and industrial equipment. Exports (Weight): In 2006, the total weight of exports to South Korea was over 14.8 billion kilograms. This was an increase of 15.8%, though this growth had slowed since 2005 (47.4%). Major weight‐based exports included fossil fuels, automobiles and automobile parts, agricultural products, livestock products, timber and forestry products, and bulk products classified as “low value export transactions and confidential commodities”.

102

The distribution of Canadian exports by province to South Korea is listed in Figure 4.63.

Figure 4.63: Province of Origin, Canadian Exports to South Korea‐ Weight

(Millions kg)

0.01 0.0047.0044.251.2557.48

6,705.33

998.1884.80423.82

1,374.21

5,127.72

0.001,000.002,000.003,000.004,000.005,000.006,000.007,000.008,000.00

British Columbia

Alberta

Saskatchewan

Manitoba

Ontario

Quebec

New Brunswick

Prince Edward Is.

Nova Scotia


Northwest Terr.

Nunavut

KG Millions

Major origins of goods destined for South Korean included Quebec, British Columbia, Alberta, and Ontario. The historic distribution of Canadian exports by geographic region is displayed in Figure 4.64.

Figure 4.64: Region of Origin, 2000‐2006 Canadian Exports To South Korea‐ Weight

(Millions kg)

7,826.5 7,781.2 6,336.25,427.1

5,635.5 7,567.17,010.5

1,516.1 776.2 909.61,354.9 2,843.3 4,853.6

7,703.5

400.4 110.0373.7196.3213.1455.8332.70.00.00.00.00.40.00.0

0%

20%

40%

60%

80%

100%


Almost the entire weight of Canadian exports bound for South Korea originated from the Eastern (51.9%) and Western (47.3%) regions in 2006. The majority of the weight of South Korean exports had previously originated from the Western region. Beginning in 2002, the Western share of South Korean exports has been steadily decreasing, while the percentage of exports from the Eastern region has been increasing. Both the percentage and total weight of exports from the Atlantic region have been fluctuating. In 2006, exports from the Atlantic region accounted for less than 1% of the total weight of South Korean exports. The weight of exports from the Territories is so small it fails to qualify as a percentage of total weight.

103

International Trade

In 2006, Canadian exports were valued at $439.5 Billion Dollars This was a decrease of 1.44% from 2005. Approximately 92% of Canadian export traffic was destined for ten countries. Table 4.2 lists these countries by total purchases and percentage of total Canadian exports (%).

Table 4.2: Canadian Exports‐ Top 10 Countries by Value

1 United States $358,738,657,184 81.62% 6 Germany $3,878,219,066 0.88%

2 United Kingdom

$10,063,379,252 2.29% 7 Korea, South

$3,266,324,301 0.74%

3 Japan $9,442,743,982 2.15% 8 Netherlands $3,059,989,113 0.70%

4 China $7,660,330,865 1.74% 9 France $2,886,593,276 0.66%

5 Mexico $4,379,239,555 1.00% 10 Belgium $2,270,174,075 0.52%

Despite an overall decrease in the total value of Canadian exports, nine of Canada’s major export partners increased their level of purchasing. Major growth was seen in the Netherlands (36.6%) and the United Kingdom (20.2%). Each of these countries rose in rank from the previous year, with the exception of Japan and France which were succeeded by the Netherlands and the United Kingdom. No change occurred in terms of rank structure among the other nations. The level of exports to the United States decreased by 4.2% from 2005. This contributed to the overall decrease in export value. Overall, the greatest demand for Canadian exports (in terms of value) was for fossil fuels (e.g. petroleum, natural gas, propane, etc.), automobiles and parts, timber and lumber, minerals (e.g. gold, aluminum, nickel, potassium, etc.), aircraft, agricultural products, livestock, and harvested fisheries.

104

In 2006, the total weight of Canadian exports was 579.2 Billion kilograms Overall this was a decrease of less than 1%. Table 4.3 displays Canada’s top export partners (in terms of weight).

Table 4.3: Canadian Exports‐ Top 10 Countries by Weight (kg)

1 United States

365,426,849,032 63.09% 6 Korea, South

14,824,067,905 2.56%

2 Germany 28,856,586,914 4.98% 7 Netherlands 13,088,928,269 2.26%

3 Belgium 26,093,111,291 4.50% 8 Spain 8,541,549,050 1.47%

4 China 21,721,982,182 3.75% 9 United Kingdom

7,894,369,395 1.36%

5 Japan 19,956,154,459 3.45% 10 Brazil 5,750,039,997 0.99%

Despite an overall negative growth in the weight of exports, the individual growth levels varied among Canada’s major export partners. China and Germany each experienced negative growth levels of 17%, though Germany remained as Canada’s second largest export destination (in terms of weight). Large surges in growth were found in the United Kingdom (13.9%), South Korea (15.9%), and Belgium (22.9%). Despite a negative growth level of 6.3%, Brazil joined the list of major Canadian export destinations, advancing in rank from eleventh place to tenth. Mexico failed to make the list and moved from sixth place to eleventh after experiencing a negative growth of 65.1%. Major export categories (in terms of weight) included “low value export transactions and confidential commodities” (15.3%), fossil fuels (e.g. petroleum, natural gases, coal, etc.), minerals (e.g. iron, potassium chloride, aluminum, etc.), and timber and forestry products.

105

In 2006, Canadian imports were valued at $396.4 Billion Dollars Overall, this was an increase of 4.44% from 2005. Approximately 82% of Canadian imports (by value) originate in 10 countries. These countries are displayed in Table 4.4.

Table 4.4: Canadian Imports‐ Top 10 Countries by Value

1 United States $217,597,263,415 54.89% 6 United Kingdom

$10,843,206,881 2.74%

2 China $34,473,135,417 8.70% 7 Korea, South

$5,762,891,232 1.45%

3 Mexico $15,982,138,378 4.03% 8 Norway $5,444,505,028 1.37%

4 Japan $15,333,503,494 3.87% 9 France $5,174,884,759 1.31%

5 Germany $11,114,978,667 2.80% 10 Algeria $4,953,558,339 1.25%

In 2006, there was little change in the rankings of Canada’s top import origins. The United States, China, Mexico, Japan, and France all remained in the same positions as they had in 2005. Germany and South Korea each advanced one rank, while the United Kingdom and Norway declined one rank. In 2005, Algeria was ranked as Canada’s eleventh largest importer (in terms of value). In 2006, Algeria’s imports (to Canada) increased by 16%, advancing it to tenth place among import origins. Italy, which had previously been ranked tenth in 2005, moved to eleventh, even though it’s level of imports increased by 4%. Among Canada’s top import partners, the United States and Norway experienced negative growth levels (‐1.08% and ‐12.18%, respectively). The highest levels of growth were found in Algeria (16.03%), China (14.25%), and Mexico (7.18%). Canada’s highest valued imports included petroleum and fossil fuels, automobiles and automotive parts, medications, and aircraft parts.

106

In 2006, the total weight of Canadian imports was 310.9 Billion kilograms Despite an increase in the value of Canadian imports, the overall weight of these imports decreased by 9.42%. Table 4.5 displays Canada’s top 2006 import partners (in terms of weight).

Table 4.5: Canadian Imports‐ Top 10 Countries by Weight (kg)

1 United States 193,842,027,233 62.35% 6 United Kingdom

8,828,225,255 2.84%

2 China 12,969,382,176 4.17% 7 Mexico 5,773,080,035 1.86%

3 Norway 9,618,748,075 3.09% 8 Japan 4,285,806,570 1.38%

4 Algeria 9,247,325,237 2.97% 9 Saudi Arabia 3,698,730,719 1.19%

5 Brazil 9,107,223,909 2.93% 10 Iraq 3,679,589,778 1.18%

The growth levels by weight among Canada’s major import partners varied greatly. With the exception of the United States, the rankings of Canada’s import partners shifted. The import weights of Brazil, Japan, Iraq, China, Mexico, and Algeria increased from 2005, while the weights of Norway, United Kingdom, United States, and Saudi Arabia decreased. With these shifts in ranking, three new countries qualified as major import partners. Despite a decrease of 7.88%, Saudi Arabia moved from 11th to 9th place, while Japan and Iraq both moved from 14th and 16th to 8th and 10th place, respectively. These nations replaced Italy, Argentina, and Venezuela, which experienced decreases of 76.95%, 94.87%, and 27.93%, respectively. This decrease resulted in Argentina dropping from 7th to 49th in terms of ranking. In terms of weight, Canada’s major import categories included petroleum and fossil fuels, metals and minerals (e.g. iron, aluminum, etc.), automotive parts, industrial production equipment, and electronic goods.

107

Import/Export Traffic by Mode

All trade statistics (including those examining commodities, imports and exports, and modal traffic) have been supplied by the International Trade Division of Statistics Canada. It should be noted that there is some discrepancy regarding the reporting of these statistics. This discrepancy emerges when dealing with the “mode” of imports and exports. The available modal categories are listed as Road, Rail, Air, Marine, and “Other”. “Other” appears to have been used as a general category when the method of transportation was either unknown, unavailable (example power lines and pipeline), or multiple modes (intermodal) were used. To help limit this category, several commodities relating to petroleum, natural gas, and electricity were formed into the new category “pipeline and energy”. In addition, there appears to be some discrepancy when classifying the mode of imports and exports. Some modes have been classified based on how traffic arrived/departed Canada, while other listings are based on the method that the traffic arrived/departed the specific location of origin/destination. Because of this, some modal traffic listings appear quite peculiar (e.g. Rail imports from Jamaica, Road exports to Russia, etc.). Overall, the majority of imports and exports traveled via land‐based modes of transportation (road, rail, and pipeline & energy). This reflects Canada’s high level of trading with the United States. As well, some of this traffic originated from (or was destined to) countries outside of North America. These instances represented cases when Canadian road, rail, and pipeline firms were used to transport goods to their final destinations. Figures 4.65 and 4.66 display the distribution of Canadian import and export traffic by mode.

Figure 4.65: 2006 Canadian Imports by Mode

Value Weight

Air13%

Water19%

Pipeline & Energy1%

Rail7%

Other3%

Road57%

Rail9%

Air2%

Other13%

Water31%

Pipeline & Energy2%

Road43%

108

Road In 2006, approximately 131.8 billion kilograms of goods valued at $222.7 billion were imported into Canada via road. Approximately 75% of this value and 88% of the weight originated in the United States. As previously mentioned, some of these statistics represent shipments that reached their final destination by road networks after arriving in Canada from other continents. Major non‐North American users of road transport were China, Japan, and Germany. Based on value, major categories of commodities included automobiles and automobile parts, postal shipments, pharmaceuticals, and electronic equipment. In terms of weight, major import categories arriving by road included industrial equipment, automobile parts, electronic equipment, and timber. RailIn 2006, approximately 26.4 billion kilograms of goods valued at $29 billion were imported into Canada via rail. Not surprisingly, the overwhelming majority of this value (84%) and weight (93%) originated in the United States. In addition approximately 8% of rail imports by value and 2% of rail imports by weight originated in Mexico.54 In terms of value, major commodities transported by rail include automobiles and automobile parts, plastics, chemicals, and minerals (e.g. copper). Based on the total weights of rail imports, major commodities include automobiles and automobile parts, minerals (e.g. iron), agricultural products (e.g. corn), and fossil fuels. MarineIn 2006, approximately 96.8 billion kilograms of goods valued at $76.4 billion were imported into Canada via marine. After road, marine is the largest mode of transportation in terms of both value (19%) and weight (31%). Although much of Canada’s import traffic takes place in the Atlantic and Pacific ports, a considerable amount of imports enter via in‐land and Great Lake ports. This was due to marine imports from the United States, which ranked eighth in value and first in weight. Based on value, Canada’s largest source of marine imports was from China (approximately 20% of total marine imports). Other major import partners included Germany, Japan, Norway, Algeria, and the United Kingdom. Based both on value and weight, major categories of commodities imported by marine included petroleum and fossil fuels, automobiles, minerals, pharmaceuticals, and electronics.

54 Although rail traffic does operate between Canada and Mexico, these values seem somewhat higher than would be expected. This may be due to a classification discrepancy (e.g. shipment arrived to Canada via air or water, but transport to final destination was by rail).

109

AirIn 2006, approximately 7.7 billion kilograms of goods valued at $50.7 billion was imported into Canada via air. Air cargo is primarily utilized for high‐value/low‐weight items and commodities. In 2006, air based imports only accounted for 1% of the total weight of all imports, yet it represented 10% of the total value. Canada’s main sources of imports arriving by air included the United States, China, United Kingdom, Germany, Japan, France, and Mexico. Major value commodities that arrived by air included pharmaceutical products, gold, electronic and computer equipment, aircraft parts, and diamonds. Based on weight, important import commodities included industrial machinery, live plants, electronic equipment, pharmaceutical products, and items returning to Canada for repair. Pipeline & EnergyIn 2006, approximately 7.3 billion kilograms of fossil fuels and electricity valued at $4.3 billion were imported into Canada via pipeline and powerline. Overall, this accounted for only 2% of the total weight of Canadian imports and 1% of the total value. The majority of the value (54%) and weight (81%) of pipeline imports was natural gas. All of these imports originated from the United States. Figure 4.66 displays the modal distribution of Canadian exports in 2006.

Figure 4.66: 2006 Canadian Exports by Mode

Value Weight

Overall the distribution of exports by value is similar to the distribution of imports, although pipeline accounted for a greater proportion of exports than imports. The modal distribution of exports by weight is quite different than that of imports. In particular, pipeline and water modes were used much more for exports, while road was used more for imports.

Air9%

Water16%

Pipeline & Energy14%

Rail17%

Other1%

Road43%

Rail13%

Air1%

Other0%

Water48%

Pipeline & Energy26%

Road12%

110

RoadIn 2006, approximately 70.5 billion kilograms of goods valued at $186.1 billion were exported from Canada via road. Of these exports, over $182 billion (65.5 billion kgs) were destined for the United States. As well, nearly $2 billion (1.2 billion kgs) of goods were shipped to Mexico.55 Based on value, major export commodities transported by road included automobiles and automobile parts, pharmaceutical products, lumber and forestry products, livestock, and goods returning to the United States for repair or resale. When based on weight, major categories of road exports included lumber and forestry products, automobiles and automobile parts, livestock, agricultural products, and fossil fuels. RailIn 2006, approximately 77.9 billion kilograms of goods valued at $75.4 billion were exported from Canada via rail. Overall, approximately 98% (both by value and weight) of rail exports were destined for the United States and the remaining 2% were destined for Mexico.56 Over 40% of the total value of Canadian rail exports consisted of automobiles and automobile parts. Other key commodities (in terms of value) included lumber and forestry products, minerals (e.g. aluminum, copper, zinc), fossil fuels, and grains. Based on weight, major rail‐based exports included lumber and forestry products, chemicals, minerals, fossil fuels, automobiles and automobile parts, and cereals. MarineIn 2006, approximately 271.8 billion kilograms of goods valued at $68.9 billion were exported from Canada via marine. Overall, the United States was the largest destination of marine based Canadian exports both in value ($18.8 billion) and weight (68 billion kg). In terms of value, Japan, China, the United Kingdom, South Korea, the Netherlands, Germany, and Norway were all major destinations of Canadian exports. Key commodities (in terms of value) that were shipped via marine included fossil fuels, cereals and pulses, timber and forestry products, minerals (e.g. copper, nickel, iron), and livestock. Based on weight, major export destinations included Germany, Belgium, China, Japan, South Korea, the Netherlands, and Spain. Major weight‐based exports included fossil fuels, minerals (e.g. iron, potassium, sulphur), cereals, lumber and forestry products, and pulses.

55 The remaining 3.8 billion kg of exports likely traveled via road from their Canadian origin before transferring to air or marine modes of transport. 56 Similar to the case of rail imports, the value of exports to Mexico may be subject to interpretation due to classification discrepancy.

111

AirIn 2006, over 3.7 billion kilograms of goods valued at $39.6 billion were exported from Canada via air. Major destinations, by value, for Canadian air cargo were the United States, the United Kingdom, Germany, France, and Japan. High valued exports included aircraft parts, gold, telecommunications equipment, diamonds, and pharmaceutical products. Major destinations, by weight, for Canadian air cargo included the United States, Germany, Italy, Mexico, and China. Based on weight, the single largest commodity leaving Canada by air was items needing repairs. This category made up 20% of total air exports. Other major commodities included industrial machinery, engines, telecommunications equipment, engines, radioactive elements and rare gases. Pipeline & EnergyIn 2006, over 152.8 billion kilograms of fossil fuels and electricity valued at over $62.9 billion were exported from Canada via pipeline and powerline. Based on value, the majority of pipeline exports consisted of petroleum (51%), followed by natural gas (43%), electrical energy (4%), and propane (2%). The weights of natural gas and petroleum were almost equal (50% and 49%, respectively), while propane made up the remaining 1% of the total weight of pipeline exports. Figures 4.67 and 4.68 display the rate of change in the value of Canadian transportation modes. These graphs (and others that similarly measure value) have been adjusted to reflect 2006 “Real” Canadian dollar amounts. The mode category of “Other” has not been included.

Figure 4.67: Rate of Change in Canadian Import Traffic by Value

‐80.00%

‐60.00%

‐40.00%

‐20.00%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

140.00%

160.00%

2001 2002 2003 2004 2005 2006

% Change

Air Pipeline & Energy Rail Road Marine Since 2001, the growth in value of traffic by pipeline and energy has been the most widely fluctuating of the transportation modes. In 2006, pipeline was the only mode to experience a negative level of growth (‐70.2%).

112

Because of the wide growth fluctuations by pipeline, the compared growth by the other modes is difficult to view. Figure 4.68 displays the change in value of Canadian import traffic without Pipeline & Energy.

Figure 4.68: Rate of Change in Canadian Import Traffic by Value (Without Pipeline & Energy)

‐16.00%

‐12.00%

‐8.00%

‐4.00%

0.00%

4.00%

8.00%

12.00%

16.00%

2001 2002 2003 2004 2005 2006

% Change

Air Rail Road Marine Each of the other (non‐pipeline) modes posted a positive growth in terms of the value of goods transported. Of these, marine was the highest (6.3%), while road was the lowest (0.5%). Figure 4.69 displays the historic modal distribution of Canadian import traffic by value.

Figure 4.69: Modal Distribution, 2000‐2006 Canadian Import Traffic by Value

($ Millions 2006)

$62,146 $55,285 $49,397 $43,858 $47,370 $48,186 $50,712

$4,629 $5,013 $14,494 $4,317$26,624 $27,895 $29,513 $26,777 $26,956 $28,260 $29,037

$256,149 $240,271 $244,696 $222,534 $222,210 $221,557 $222,786

$64,452 $61,485 $64,366 $65,334 $67,628 $71,915 $76,495

$541 $1,767 $516 $690 $2,327 $13,095$4,120$7,666 $9,406$1,834

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2001 2002 2003 2004 2005 2006Air Other Pipeline & Energy Rail Road Marine

113

Although the total value of goods imported annually by road has fluctuated over the past decade, the proportion of goods shipped by road has declined at a fairly regular rate. In 2000, approximately 62.2% of the total value of Canadian imports was transported by road. This declined to 56.2% in 2006. Since 2000, there has been an increase in the proportion of import goods arriving via marine traffic, from 15.7% in 2000 to 19.3% in 2006. The proportion of imports arriving to Canada by air and rail traffic has remained constant since 2002 at 12% and 7%, respectively. Figure 4.70 displays the modal rate of change by Canadian import traffic based on weight.

Figure 4.70: Rate of Change in Canadian Import Traffic by Weight

‐80.00%

‐30.00%

20.00%

70.00%

120.00%

170.00%

2001 2002 2003 2004 2005 2006

% Change

Air Pipeline & Energy Rail Road Marine The growth of pipeline & energy traffic by weight was ‐75.2%. This is very close to the decrease in value of this mode in 2006 (displayed in Figure 4.33), suggesting that the overall decrease in the imports of fossil fuels and electricity was the result of reduced demand, rather than a reduced price change. The growth changes by weight do not correspond with the changes in value of the other modes. The overall weight of road and marine import traffic decreased while the value increased. Similarly, import weights by air and rail increased, though at a lower levels than the values of the same modes.

114

Figure 4.71 displays the historic modal distribution of Canadian import traffic by weight.

Figure 4.71: Modal Distribution, 2000‐2006 Canadian Import Traffic by Weight

(Millions kg)

3,450 2,861 3,605 4,035 7,260 6,950 7,76411,691 27,029

40,53118,66522,792

29,904 7,39820,889

19,078 21,66823,713

26,160 26,487

73,660 71,466 74,841 74,941108,570

135,828 131,897

105,601 100,438 99,467 105,697102,955 117,372 96,833

698 1,111 1,983 3,4223,476 7,686 15,12818,662

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


In 2000, approximately 51.4% of the total weight of goods imported to Canada arrived by marine traffic. Since then, the proportion of weight arriving by marine mode has decreased significantly (approximately 31.1% in 2006). In 2004, the total tonnage of imports arriving by road was greater than that arriving by marine (39.2% by road, 37.2% by marine). The proportion of weight imported by road has continued to increase annually (approximately 42.4% in 2006). The proportion of import weight moved by rail has fluctuated over the last decade between 7% and 10%. Until 2005, the proportion of weight delivered by pipeline increased steadily from 1.7% in 2000 to 8.7% in 2005. This decreased significantly in 2006 to 2.4%.

115

Figure 4.72 displays the rate of change of Canadian export modal traffic.

Figure 4.72: Rate of Change in Canadian Export Traffic by Value

‐25.00%

‐20.00%

‐15.00%

‐10.00%

‐5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

2001 2002 2003 2004 2005 2006

% Change

Air Pipeline & Energy Rail Road Marine As previously mentioned, the total value of Canadian exports decreased by 1.44% due to a decrease in the value of exports to the United States (‐4.2%). This is reflected in the growth change of Canada’s export traffic. The decrease in export value to the United States resulted in negative growth for the modes of pipeline & energy (‐5.3%), rail (‐3.9%), and road (‐3.4%). Similarly, the modes of air and marine (which service international destinations outside of North America) each experienced increases in the value of cargo that was exported (1.6% and 11.5% respectively). Figure 4.73 displays the historic modal distribution of Canadian export traffic by value.

Figure 4.73: Modal Distribution, 2000‐2006 Canadian Export Traffic by Value

($ Millions 2006)

$41,589 $39,288 $35,412 $34,955 $36,357 $38,995 $39,604$8,018 $7,604 $6,955 $6,390 $6,613 $6,610 $6,446$49,767 $52,351 $41,113 $50,626 $54,604 $66,431 $62,911

$87,987 $86,852 $86,383$79,244 $82,836 $78,433 $75,404

$234,952 $223,323 $225,252 $192,675 $197,878 $193,607 $186,170

$54,278 $51,460 $51,998 $52,003 $56,993 $61,857 $68,965

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2001 2002 2003 2004 2005 2006

Air Other Pipeline & Energy Rail Road Marine

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The proportion of total Canadian export value transported by road has declined over the last five years. In 2002, approximately 50.4% of the total value of Canadian exports was transported by road. This has since decreased to 42.4% in 2006. During this same period, the proportion of marine and pipeline exports have increased (marine grew from 11.6% in 2002 to 15.7% in 2006, while pipeline climbed from 9.2% in 2002 to 14.3% in 2006). The value of air traffic also increased, though at a much more gradual level, from 7.9% in 2002 to 9.0% in 2006. Figure 4.74 displays the modal rate of change by Canadian export traffic based on weight.

Figure 4.74: Rate of Change in Canadian Export Traffic by Weight

‐50.00%

‐30.00%

‐10.00%

10.00%

30.00%

50.00%

70.00%

90.00%

110.00%

130.00%

2001 2002 2003 2004 2005 2006

% Change

Air Pipeline & Energy Rail Road Marine Despite an overall decrease in the weight of Canadian exports, each export mode experienced an increase in growth with the exception of road traffic which experienced a significant decrease of ‐19.2%. Although the value of road exports decreased, it was not as significant as the decrease in the weight of road exports. This may suggest an increase in the road transport of high value, low weight goods (e.g. pharmaceutical products).

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Figure 4.75 displays the historic modal distribution of Canadian export traffic by weight.

Figure 4.75: Modal Distribution, 2000‐2006 Canadian Export Traffic by Weight

(Millions kg)

142,573 147,386 146,525 144,867 149,754 149,197 152,803

64,302 64,120 65,690 69,474 75,989 76,117 77,969

75,173 72,729 73,711 70,435 73,826 87,342 70,587

215,378 230,737 213,496 222,086 239,973 263,930 271,858

3,7453,4672,5811,8741,6672,8441,3412,2652,3082,6043,4533,9783,8854,139

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


In 2002, approximately 42.3% of the total weight of Canadian exports was shipped by marine traffic. This has increased annually to 46.9% in 2006. Over the last decade, less than 1% of Canada’s annual exports have traveled by air, while rail traffic has annually accounted for roughly 13%. In 2006, over a quarter of Canada’s total export weight flowed through pipelines. The annual proportion of Canadian export weight traveling by pipeline has fluctuated between 25% to 29% since 2000.

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Emerging Transportation Issues

In 2006 and 2007 there were a variety of developments throughout the Canadian transportation sector. These events have affected transportation capacities, demands, and operational efficiencies. Rail • In December 2007, VIA Rail issued a $100 million contract to CAD Railway

Industries to rebuild and upgrade VIA’s fleet of F‐40 locomotives. The aim of the project is to improve reliability and reduce maintenance costs and greenhouse gas emissions. The project will last five years with the first locomotive being delivered in 2009 with completion in 2012.

• Approximately $300 million will be directed towards the Roberts Bank Rail Corridor. These funds will be used in multiple projects aimed to reduce congestion, increase efficiency, and improve safety along the corridor. Funding is being provided by multiple levels of government and various stakeholders.

• $10.4 million was used to fund over 100 railway crossing safety improvement projects across Canada. The funding was through Transport Canada’s Grade Crossing Improvement Program.

• In 2007, CN shipped approximately 4.7 million carloads and moved 184,148 (million) revenue ton miles. Although the number of carloads decreased by ‐1.7% from 2006, the decrease in revenue ton miles was less than 1%.

• In 2007, CPR shipped approximately 2.6 million carloads and moved 129,352 (million) revenue ton miles. These were increases from 2006 of 3% and 5.3% respectively.

• In 2007, VIA Rail carried over 4.1 million passengers. This was an increase of approximately 2.2% from 2006.

Road • A shortage of drivers remains as a major concern for the trucking industry. • Increasing fuel prices continue to increase freight rates. • Border delays and security policies continue to cause congestion and increasing wait

times. Marine • In 2007, the Port of Vancouver handled 82.7 million tonnes of cargo. This was an

increase of 3.9% from 2006. • In 2007, the Port of Montreal handled 11.8 million tonnes of cargo. This was an

increase of 7.6% from 2006. • In 2007, the Port of Halifax handled 12.2 million tonnes of cargo. This was a decrease

of approximately ‐10.5% from 2006. • The government of Manitoba announced the dedication of $68 million to increase the

capacity of the Port of Churchill and to improve the rail link between Churchill and

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The Pas. Funding will be provided through a cost share arrangement between the provincial government and port owner, OmniTRAX Inc. The government will contribute $48 million, while OmniTrax will contribute the remaining $20 million.

• Concerns regarding the security of Canadian ports were raised by various departments and agencies. Key concerns included the smuggling of individuals (illegal immigrants and terrorists) and the transporting of WMD (e.g. “Dirty Bombs”).

Air

• In 2007, Air Canada flights generated approximately 61,083 million available seat miles. This was an increase of 2.8% from 2006.

• In 2007, West Jet flights generated approximately 14,545 million available seat miles. This was an increase of 16% from 2006.

• In 2007, West Jet announced the addition of routes to Mexico and the Caribbean. Pipeline

• In 2007, the construction of the Keystone Pipeline was announced. The proposed pipeline will transport crude oil from Hardisty, Alberta to locations in Illinois and Oklahoma. The pipeline will use 860 km of existing pipeline (converted from natural gas). The project is scheduled to begin in spring 2008 and is estimated to cost $5.2 billion (US).

• The McKenzie pipeline remained under review during 2007. The proposed pipeline would run 1200 kilometers from the Northwest Territories to Alberta. Increasing labour and material costs and opposition from native and environmental groups have put the project on hold. Studies are currently being carried out in regards to the commercial feasibility of the project. A decision is to be made in the fall of 2008.

• In the summer of 2007, an accident caused the rupture of a pipeline running through Burnaby, British Columbia. The pipeline transfers crude oil from a terminal at the base of Burnaby Mountain to a tanker facility on Burrard Inlet, BC. The pipeline was shut off shortly after the accident, however, over 230,000 litres still escaped. Crews were dispatched to contain and clean the spill, which had covered a residential neighborhood and had swept to the inlet via through the sewer system.

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5.0 Trade

Methodology

A large major intent of the Manitoba Transportation Report is to convey Manitoba’s relative position in Canada’s total international trade. Achieving this purpose requires a reliable source of information relating to Canadian international trade. All trade information presented in this section has been provided by Statistics Canada’s International Trade Division, which collects annual international trade data on all Canadian provinces. The information provided by this division is extensive and includes data such as, commodities traded, origins, destinations, value and weight. Modal information is available as well. As extensive as this database is, there are inherent limitations to this trade information requiring necessary caveats to be noted. These will be discussed below. Customs‐based vs. Balance of Payments Trade Statistics

All trade data presented in this section is Customs‐based. This differs from the second method of trade presentation; the Balance of Payment (BOP) method. The main difference between the two models is the data based on Customs involves the physical movement of goods and recorded on Customs documents while the BOP method tracks the flow of money between Canada’s business and government agencies and the rest of the world. Import vs. Export Data Import statistics as collected by Customs are based on the Province of Clearance, meaning that goods are recorded at the province in which they were cleared by Customs. This may not coincide with the province in which these commodities are ultimately consumed. For example, imported goods from Asia but cleared through Manitoba can possibly be consumed in another Canadian province. Customs documentation does not track the final provincial destinations. Export statistics are recorded by Customs by Province of Departure from Canada (the Export analogue to Imports’ Province of Clearance). Additionally, Province of Origin (the province where that the goods were grown, extracted or manufactured) are available for export data. Province of Origin does not necessarily match Province of Departure. For example, commodities that originated in Alberta could have exited through Manitoba and vice versa. The availability of both the origin and departure data offers analysis of Export Data a “richness” not available to analysis of Import Data. Any review of trade routing and provinces’ use of their own and other provinces’ transportation infrastructure is understandably limited to analysis of Export Data.

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Trade by Sector With the purpose of attempting to quantify sector based trade, the International Trade Division has created an internal commodity‐sector concordance list which allows a basic approximation of sector trade. Caution must be taken as this is a rather simple measurement in an attempt to quantify the relative importance of sector‐based trade in Manitoba and Canada. Modal Information When using Customs‐based trade statistics, there are caveats to be noted on the mode of transport for both imports and exports. For imports, information on the transportation mode of a commodity usually refers to the last mode by which commodities were transported to the Canadian port of clearance and documented by Customs. This may not always be the mode by which goods arrived at the Canadian port of entry in the case of inland clearance. For exports, the mode of transportation recorded represents the last mode used to carry goods across international borders. This transportation mode may not necessarily be the same mode used to deliver cargo within Canada, that is, trans‐shipment effects are not recorded and are not readily available. For example, some grain movements to China may not be recorded as marine.

With various data sources, each with their own limitations, the Trade Section will follow 2 main paths of analysis:

• The first will focus on the content of trade, emphasizing commodity‐specific information, but also source or destination country information.

• The second will focus on the movement mechanism of that trade, emphasizing modes of movement and, logically, routing used (proxied by export data flows).

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Manitoba’s Trade Content

Canada is a trade‐based country, with a resource‐based profile. As such, its export commodity distribution tends to be less complex than its import commodity profile. Simply put, Canada exports large amounts of a relatively short list of generally less‐processed goods while importing smaller amounts of a longer list of generally more processed goods. Within Canada, some provincial jurisdictions have an export/import contrast greater than that of the national average, while others have a more muted contrast. Generally, the prairie provinces are perceived as being more resourced‐based. Within that group, Manitoba is sometimes assessed as being the least so, having a more heterogeneous economic base. However, Manitoba still depends heavily on trade, with a profile that reflects its resource base.

Manitoba’s Exports

As with other provinces, Manitoba also gains significantly from markets outside its borders. In 2006, Manitoba exported over $10.4 Billion to other countries, an increase of almost 4% over the export level of 2005. The mix of commodities exported continued to be very diverse, as the “Top 10” export commodities collectively accounted for about 40% of that value (Table 5.1). As in the past, major export commodities comprised primary or extractive industry goods such as crop products, metals and energy resources. Electrical energy, the 5th ranked export in 2004 (and first place in ranking in 2005), ranked second in value in 2006. Nickel exports, a commodity tending towards “peaks and valleys”, rose to first place ranking in 2006 as a result of a more than doubling in value relative to 2005. As in the past, the list of more value‐added exports of consequence is consistent with the list of major industries with production clusters in Manitoba. Internet pharmacy sector activity is likely the cause for medications in dosage for representing the third‐ranked HS06 commodity group. Potato production is also a well‐established cluster, with acreage disproportionate to other agricultural land use in the prairies. Similarly, Manitoba’s comparative advantage in swine production is reflected in the mix of major provincial exports. The bus and bus body sectors are also well‐represented.

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Table 5.1: 2006 Manitoba Top 10 Exports (HS06) (by Value) (Regardless of Prov. of Export)

Commodity Value

($,000 Cdn) Pct of MB Exports

Nickel – Unwrought, Not Alloyed $915,188 8.8% Electrical energy $637,888 6.1% Medicaments NES – in Dosage $551,416 5.3% Unrefined Copper; Copper Anodes for Electrolytic Refining $423,141 4.1% Meslin and Wheat NES $395,523 3.8% Buses/Public Transport Passenger Vehicles – Diesel/Semi‐Diesel Engine $276,987 2.7% Potatoes prepared or preserved other than by vinegar or acetic acid, frozen $260,556 2.5% Parts of Airplanes or Helicopters NES $255,973 2.5% Bodies for Motor Vehicles other than Automobiles (Motor Cars) $226,642 2.2% Rape or Colza Seeds – Low Erucic Acid (Whether or Not Broken) $217,059 2.1% Total of Top 10 $4,160,373 39.9% Total $10,427,954 Source: Strategis Trade Data Online http://www.ic.gc.ca/sc_mrkti/tdst/tdo/tdo.php#tag

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If trade is the lifeblood of an economy, transportation is the circulatory system. As such, the efficiency or “health” of the transportation sector is integral to the optimization of trade. It therefore falls upon the transportation sector to deliver the $10.4 Billion in exports to the waiting markets. The USA is clearly the main recipient of the majority of Manitoba’s exports, receiving three quarters (76%) of the value of Manitoba’s exports in 2006 (Figure 5.1), essentially unchanged from the share recorded in 2005.

Figure 5.1: 2006 Manitoba’s Top Countries of Export (by Value)

($11.6 Billion)

Other 11%

Belgium 1%Taiwan 1%India 1%Hong Kong 2%Mexico 2%

China 3%Japan 4%

USA 75%

As in 2005, Japan ranks a distant second, with a further decline from 5.2% of Manitoba’s export value in 2005 to 3.7% in 2006. The Asian powerhouse, China, recorded a decline in share of Manitoba’s exports, from 4.5% in 2004 to 2% in 2005, but rose again in 2006 to capture 3.2% of Manitoba’s exports (by value). Hong Kong re‐established its 4th place ranking on the strength of a 57% increase in exports from Manitoba from 2005 to 2006. Mexico slipped from 4th ranking to 5th, with a reduction in value of exports from Manitoba of 22%. A listing of the “Top 10” countries of destination for Manitoba’s exports is presented in Table 5.2. Relative to 2005, Australia dropped out of the top 10, while South Korea slid to 10th ranking after entering the “Top 10” to 6th ranking in 2005. India entered the “Top 10” in 2006, capturing 6th rank with 1.3% of Manitoba’s exports by value. The findings presented in Table 5.2 are similar to those presented in Table 5.2A. The data in these 2 tables differ slightly in scale, although the mix is fairly consistent. Table 5.3 is drawn from the HS (Harmonised System) of commodity classification which replaced the SCC (Standard Commodity Classification) system. The HS‐based tables are generated through the Strategis site of Industry and Trade Canada. These data tend to experience updating and revisions well after the end of the calendar year for which the data apply. Consequently, analysis using the same syntax conducted at different times for the same year of data can result in slightly different outcomes.

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Table 5.2: 2006 Manitoba Top 10 Countries of Export Destination (by Value)

Country of Destination Value ($,000 Cdn) Pct of MB Exports

United States $7,903,137 75.8% Japan $387,813 3.7% China $331,215 3.2% Hong Kong $204,753 2.0% Mexico $176,587 1.7% India $135,493 1.3% Taiwan (Taipei) $96,146 0.9% Belgium $78,073 0.7% United Kingdom (U.K.) $77,647 0.7% Korea, South $76,054 0.7% Total of Top 10 $9,466,917 90.8% Total $10,427,954 Source: Strategis Trade Data Online http://www.ic.gc.ca/sc_mrkti/tdst/tdo/tdo.php#tag

The findings presented in Table 5.3 are generated from a static dataset created by the Industry and Trade Division of Statistics Canada for use by the University of Manitoba Transport Institute. There are understandable differences with the findings in Table 5.2, although the province’s economic structure as described by the two tables is essentially the same.

Table 5.3: 2006 Manitoba Top 10 Countries of Export Destination (by Value)

Country of Destination Value ($,000 Cdn) Pct of MB Exports

United States $8,698,194 75.1% Japan $470,787 4.1% China $352,079 3.0% Mexico $232,565 2.0% Hong Kong $204,753 1.8% India $152,662 1.7% Taiwan (Taipei) $96,152 0.8% Belgium $92,469 0.8% United Kingdom (U.K.) $82,862 0.7% Korea, South $80,795 0.7% Total of Top 10 $10,463,318 90.3% Total $11,585,814 Source: Statistics Canada: Industry and Trade Division

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While the value of exports is critical in the analysis of trade, the weight and form of those exports bears on the transportation infrastructure needed to deliver those exports. As expected, the USA continues to dominate the distribution of weight of Manitoba’s exports, although not to the extent that it dominates the value (Figure 5.2). This would suggest that the USA is the recipient of higher value per weight commodities than are other recipients of Manitoba’s exports. In all likelihood, this is a reflection of bulk commodities such as grains being more likely destined for offshore markets.

Figure 5.2: 2006 Manitoba’s Top Countries of Export (by Weight)

(13.2 Million Tonnes)

Belgium 1%Sri Lanka 2%Indonesia 2%Pakistan 1%

Mexico 5%

China 2%

Japan 7%

Spain 1%

India 2%

Other 17%

USA 60%

Turning to the mechanism of delivery of these commodities, almost half (48%) of Manitoba’s exports are carried by truck (Figure 5.3), representing a fractional reduction in road’s share relative to 2005.

Figure 5.3: 2006 Manitoba’s Mode of Exports (by Value)

($11.6 Billion)

Road 49%

Rail 15% Air 3%

Water 22%

Pipe/Powerline10%

Other1%

Water transport (the main mode for exports destined for the Pacific Rim or Europe) ranks second, as it had in previous years, continuing to account for about one‐fifth of the value of Manitoba’s exports. Rail’s share is relatively unchanged from 2004 and 2005.

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Shifting to the perspective of weight rather than value (Figure 5.4), Water becomes the dominant mode, representing about 42% of Manitoba’s exports. It should be noted that the mode assigned is usually the mode which takes the product beyond Canada’s borders. As such, while over 40% of the weight of Manitoba’s exports left Canada by water in 2006, most of the commodities likely moved to the seaport by rail or truck.

Figure 5.4: 2006 Manitoba’s Mode of Exports (by Weight)


Other0%

Pipe/Powerline10%

Water43%

Air1%

Rail25%

Road21%

As in 2004 and 2005, rail ranks marginally ahead of truck when viewed on a weight basis, reinforcing the role of water and rail as the main carriers of bulk, low unit value commodities. At the other extreme, air accounted for about 3% of the exports by value, but less than 1% of exports by weight. This is consistent with air freight’s focus on high speed delivery of relatively high value products.

Manitoba’s Imports

The destination of imported commodities once they cross Canada’s borders is tracked differently than the destination of exports. The destination country of exports is well documented, but once a commodity has cleared the Canadian border on importation, the final province of destination can sometimes be elusive. As such, imported commodities are defined on the basis of Port of Clearance. The “Top 10” commodities entering Canada through Manitoba’s ports are presented in Table 5.3. Under the very disaggregated HS06 system, the “Top 10” export commodities accounted for slightly over 1/3 of the total value of exports while the “Top 10” import commodities only represent about 13 to 14 percent of imports. Consequently, it was deemed more appropriate to analyze imports using the more aggregate HS02 system. Using the HS02 system, 72% of Manitoba’s imports are represented by the Top 10 group (Table 5.4).

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Table 5.4: 2006 Manitoba Top 10 Imports (HS02) (by Value)

Commodity Value

($,000 Cdn) Pct of MB Imports

Nuclear Reactors, Boilers, Machinery and Mechanical Appliances $3,389,871 27.3% Motor Vehicles, Trailers, Bicycles, Motorcycles and Other Similar Vehicles $1,731,680 13.9% Electrical or Electronic Machinery and Equipment $1,014,048 8.2% Plastics and Articles Thereof $566,650 4.6% Articles of Iron or Steel $558,373 4.5% Furniture, and Stuffed Furnishings; Lamps and Illuminated Signs; Prefabricated Buildings $372,975 3.0% Miscellaneous Chemical Products $353,052 2.8% Optical, Medical , Photographic, Scientific and Technical Instrumentation $317,459 2.6% Printed Books, Newspapers, Pictures, Manuscripts and The Like $304,104 2.4% Paper, Paperboard and Articles Made From These Materials $273,477 2.2% Total of Top 10 $8,881,689 71.5% Total $12,426,217 Source: Strategis Trade Data Online http://www.ic.gc.ca/sc_mrkti/tdst/tdo/tdo.php#tag In 2005, the value of products imported via Manitoba exceeded the value of Manitoba exports by about 16% (versus a gap of only 6% in 2004). In 2006, this gap between commodities imported via Manitoba and Manitoba exports rose to about 19%. The single largest group of imports into Manitoba, “nuclear reactors, boilers, machinery and mechanical appliances,” account for about 27% of Manitoba’s imports by value. Motor vehicles and similar transportation‐related items accounted for about 14% of Manitoba’s imports. Just as the USA dominated the geographic distribution of Manitoba’s exports, the vast majority (82%) of imports passing through Manitoba’s ports entered from the USA (Table 5.5). This share was essentially unchanged from the findings for 2004 and 2005. As in 2005, China ranked a distant second after the USA. Germany and Mexico swapped their 3rd and 4th ranking from 2005, but were essentially tied in both 2005 and 2006.

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Table 5.5: 2006 Top 10 Imports by Countries Clearing Imports Through Manitoba (by Value)

Source Country Value ($,000 Cdn) Pct of Imports Through MB

United States $10,136,012 81.6% China $453,590 3.7% Germany $249,298 2.0% Mexico $245,884 2.0% Japan $154,442 1.2% Canada $135,514 1.1% United Kingdom $106,165 0.9% Taiwan $97,489 0.8% Italy $91,233 0.7% France $76,907 0.6% Total of Top 10 $11,746,534 94.6% Total $12,420,277 Source: Statistics Canada: Industry and Trade Division

Over the last 3 three years (2004, 2005, 2006), the share of imports clearing through Manitoba from one of the top 10 countries has remained fairly stable at about 95%. Regarding transportation mode of import, trucking dominates, with 85% of the value of Manitoba’s imports entering via that particular mode (Figure 5.5). Rail, after rising from 4% in 2004 to 6% in 2005, dropped back slightly to 5% in 2006. Air’s share dropped from 9% in 2004 to 6% in 2005, and has essentially remained at that level in 2006.

Figure 5.5: 2006 Mode of Imports Clearing Via Manitoba (by Value)

($12.4 Billion)

Other 1%

Pipe/Powerline 0%

Water 3%

Air 6%

Rail 5%

Road85%

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Figure 5.6: 2006 Mode of Imports Clearing Via Manitoba (by Weight)


Road63%

Rail 30%

Air 1%Water 3%

Pipe/Powerline0%

Other 3%

Viewing trade flows exclusively on a value basis can sometimes be misleading as shifts can very easily be the result of shifts in commodity prices or exchange rates. On a weight measure, while road continues to dominate, rail becomes much more of a factor, accounting for 30% of commodities clearing through Manitoba’s ports (Figure 5.6), up from 22% in 2004 and 27% in 2005. As in 2004 and 2005, the distribution of weight vs. value of imports and exports reinforces the assessment that Manitoba tends to export bulk commodities in exchange for more processed manufactured goods. It also highlights a challenge to the logistics of maintaining front haul and backhaul parity when the weight of exports significantly outstrip those of imports.

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Export Routing and Usage of Transportation Infrastructure

Canada’s transportation infrastructure is configured to facilitate interprovincial movement as part of the import and export process. The extreme simplification of this is found in the system which facilitates movement of bulk goods by rail to seaports where the use of highly cost‐efficient water movement can be maximized. The St. Lawrence Seaway/Great Lakes system allows water movement to reach to the heart of the continent. On another scale, provinces can shift commodities through adjacent provinces in order to minimize transport through the more challenging elements of Canada’s geography. The net effect is that there is a great divergence in the degree to which provinces can use their own transportation infrastructure to facilitate trade with other countries (even when the largest trading partner shares our southern border). The series of bar charts in this subsection (Figures 5.7 through 5.14) summarize the degree to which provinces are successful in shipping out their exports essentially using their own transportation infrastructure. It should be noted that the hydroelectric and petrochemical sectors tend to use dedicated infrastructures. Therefore, for the purposes of discussions about load on infrastructure, those sectors (the “Powerline and Pipeline” sector) are excluded from this discussion. In essence, these charts follow a template by which the percentage of a jurisdiction’s exports (quantified by value or tonnage and listed beside the jurisdiction’s name in the chart label) depart Canada from that jurisdiction’s ports. For example, 90.6% of Ontario’s $198B in exports leave Canada from Ontario’s ports (Figure 5.7). Over four fifths (83.9%) of New Brunswick’s $10B in exports leave Canada from New Brunswick ports, while 82.3% of BC’s $31B in exports leave from BC’s ports. At the other end of the spectrum, about 10% or less of exports from Prince Edward Island, Yukon, or Nunavut leave Canada directly from those jurisdictions. In 2005, Yukon appeared more “self‐sufficient”, moving 20% of its exports (by value) via its own infrastructure. However, the major shift was with the Northwest Territories. In 2005, only 9% of the territory’s exports left directly from NT, while in 2006, this rose to 71%. NT represents a special case, likely with the diamond extraction industry contributing greatly to the territory’s overall exports. While the value of Canadian exports in general average about $760 per tonne, NT exports are worth, on average, $86,000 per tonne, and almost all (99%) of the value of NT exports leave via air. While the per tonne or percentage values are high, they are still drawn from a small base of 16,000 tonnes of exports. Consequently, an increase in the level of customs activity on‐site in NT could explain the shift from 2005 to 2006.

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Figure 5.7: Pct of Provinces’ Exports Leaving CDA From Originating Prov. (by Value)

(Total Non‐Powerline & Pipeline Exports ‐ $378 Billion)

5.0%

7.1%

10.6%

21.1%

25.7%

34.6%

53.9%

55.4%

58.7%

70.8%

82.3%

83.9%

90.6%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

YK ($40M)

NU ($6M)

PE ($837M)

SK ($10B)

AB ($33B)

NS ($4B)

NL ($5B)

MB ($10B)

QC ($72B)

NT ($1.4B)

BC ($31B)

NB ($10B)

ON ($198B)

As noted in previous editions, provinces such as Alberta and Saskatchewan appear quite dependent on other provinces’ transportation infrastructure to, at least in part, move their export ‐ particularly in contrast to their third prairie neighbour, Manitoba. On a weight basis (perhaps a better indicator of load on transportation infrastructure), BC, New Brunswick and Ontario are all fairly export transport self‐sufficient (Figure 5.8). To a slightly lower level, Quebec is also self‐sufficient. All other provinces/territories depend on other jurisdictions to move over half of their exports (by weight). Only about 30% of Manitoba’s exports (by weight) leave directly from Manitoba. However, in contrast to the other prairie provinces (Saskatchewan: 14%, Alberta: 9%), Manitoba’s transportation infrastructure is quite successful in moving Manitoba’s exports.

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Figure 5.8: Pct of Provinces’ Exports Leaving CDA From Originating Prov. (by Weight)

(Total Non‐Powerline & Pipeline Exports – 429 Million Tonnes)

3.8%

7.5%

8.6%

13.9%

22.7%

26.7%

29.8%

34.7%

71.7%

78.8%

79.8%

84.2%

84.2%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

NU (2K)

PE (646K)

AB (54M)

SK (34M)

NL (20M)

YK (4K)

MB (12M)

NS (15M)

QC (139M)

ON (76M)

NB (15M)

NT (16K)

BC (62M)

On the following pages, Figures 5.9 through 5.14 repeat this representation specifically for road, rail, and marine exports. Of Ontarioʹs $120B that is exported by road, 95.3% is exported directly from Ontarioʹs road infrastructure rather than using other provincesʹ roads. In road‐based exports, Manitoba slipped to third place behind BC (last year’s 3rd place), and retained its third place ranking on a weight basis. (Figure 10). However, it retains a substantial lead over the other prairie provinces, shipping 86.3% of its $5.5B road exports through Manitoba ports (versus 63.5% for Alberta and 55.7% for Saskatchewan). In terms of rail, Ontario stands alone, handling almost all of its rail exports without using other provinces’ infrastructure. About one‐third of Saskatchewan’s exports leaving by rail, and about one‐quarter of Manitoba’s exports by rail leave by the originating province’s rail ports, in contrast to only about one‐tenth of Alberta’s exports leaving by rail. Regarding marine, provinces such as BC, New Brunswick, Quebec, and Nova Scotia (on value) are, as one would expect, those jurisdictions with modal self‐sufficiency. While modal self‐sufficiency for exports is not necessarily a determinant in definition of a “portal” or corridor “hub”, it may be a desirable trait. If so, Canada’s seaport provinces are portals or hubs, but so too is Ontario a rail portal or hub, and Manitoba is Central Canada’s road portal.

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(Road Exports ‐ $186 Billion)

0.0%

0.0%

0.0%

0.0%

0.1%

22.5%

47.6%

55.7%

63.5%

81.1%

86.8%

88.7%

95.3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

NU ($501K)

NT ($1.3M)

PE ($531M)

NS ($2.1B)

NL ($336M)

YK ($7M)

QC ($36B)

SK ($1.8B)

AB ($7.9B)

NB ($2.2B)

MB ($5.5B)

BC ($9.4B)

ON ($120B)


(Road Exports – 70.6 Million Tonnes)

0.0%

0.0%

0.0%

0.0%

0.0%

44.0%

46.8%

60.2%

64.2%

68.5%

86.3%

91.2%

96.5%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

NU (1,124)

NT (260)

PE (421K)

NS (629K)

NL (96K)

SK (2M)

QC (18M)

AB (4.2M)

NB (2.5M)

YK (1,379)

MB (2.8M)

BC (6.3M)

ON (33.6M)

135


(Rail Exports ‐ $75.4 Billion)

0.0%

0.0%

0.0%

9.2%

26.7%

30.5%

39.2%

39.7%

42.6%

97.9%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

PE ($11M)

NL ($4M)

NS ($449M)

AB ($8.8B)

MB ($1.8B)

SK ($2.9B)

BC ($6.7B)

QC ($12B)

NB ($1.1B)

ON ($41.5B)


(Rail Exports – 78 Million Tonnes)

0.0%

0.0%

0.0%

10.7%

26.9%

31.0%

39.5%

39.6%

45.8%

92.3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

NL (8.6K)

PE (23K)

NS (688K)

AB (15.4M)

MB (3.4M)

SK (12.4M)

NB (1.8M)

BC (14.4M)

QC (12M)

ON (17.9M)

136


(Water Exports ‐ $69 Billion)

0.0%

0.0%

0.0%

0.0%

0.0%

0.8%

6.8%

12.2%

57.0%

70.8%

84.3%

91.6%

97.0%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

NU ($2.5M)

NT ($17M)

YK ($31M)

SK ($5B)

AB ($12.7B)

MB ($2.6B)

PE ($102M)

ON ($13B)

NL ($4.5B)

QC ($10.2B)

NS ($1.4B)

NB ($6.6B)

BC ($12.9B)


(Water Exports – 264 Million Tonnes)

0.0%

0.0%

0.0%

0.0%

0.0%

1.9%

14.5%

22.8%

35.3%

37.9%

78.6%

89.6%

98.5%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

NU (691)

NT (2K)

YK (2K)

SK (19.9M)

AB (31.9M)

MB (5.6M)

PE (94.6K)

NL (19.5M)

ON (20.7M)

NS (13.3M)

QC (108M)

NB (11M)

BC (41.5M)

137

Usage of Manitoba’s Transportation Infrastructure

Manitoba’s infrastructure appears to be well utilized in facilitating the province’s export obligations. However, the previous section appears to indicate some of our neighbours are less successful in meeting their own export requirements under the confines of their own infrastructure. In 2006, about $21 Billion in exports passed out of Canada with Manitoba as the point of exit (Figure 5.15). Of this amount, half originated in Alberta, with Manitoba only responsible for 30%.

Figure 5.15: 2006 Provincial Exports Leaving Via Manitoba (by Value)

($21.3 Billion)

Other 0%

ON 6%

SK 12%

BC 2%

AB 50%

MB 30%

However, in the context of transportation infrastructure, discussions should exclude the powerline and pipeline sectors. These modes function separately from the more traditional road, rail, air and water modes, and their inclusion would only serve to “muddy the waters” – particularly in the context of Alberta’s substantial oil and gas exports. After removing these sectors, the situation in the context of transportation infrastructure becomes clearer (Figure 5.16). Over half (58%) of exports (by value) leaving via Manitoba originated in Manitoba in 2006 (up from 56% in 2005). Alberta‐sourced commodities represented the next largest segment (14%), followed by Ontario (12%) and Saskatchewan (11%). This represented a slight growth in the importance of Alberta in exports via Manitoba and a reduction for Saskatchewan. Overall, the value of exports leaving via Manitoba rose about 8% relative to 2005 levels.

138

Figure 5.16: 2006 Provincial Exports Leaving Via Manitoba (by Value)

(Excl. Powerline and Pipeline Sectors: $10.4 Billion)

MB 57%

AB 14% BC 5%

SK 11%

ON 12%

Other 1%

On a tonnage basis (Figure 5.17), Saskatchewan and Manitoba are almost equal as contributors to exports leaving via Manitoba (34% and 35%, respectively). Alberta (17%) is a distant third, although it rose from 12% in 2005, and Ontario is responsible for 8% of exports via Manitoba (down from 10% in 2005).

Figure 5.17: 2006 Provincial Exports Leaving Via MB (by Weight)

(Excl. Powerline and Pipeline Sectors: 10.2 Million Tonnes)

Other 0%

ON 8%

SK 34%BC 6%

AB 17%

MB 35%

139

Still looking on a tonnage basis, rail carries over half (51%) of the exports leaving via Manitoba, ahead of the 37% from road. This is likely due to a disproportionate focus on rail for moving Saskatchewan’s exports through Manitoba to US markets.

Figure 5.18: 2006 Mode of Exports Leaving Via MB (by Weight)

(Excl. Powerline and Pipeline Sectors: 10.2 Million Tonnes)

Road37%

Rail51%

Air1%

Water5%

Other6%

With Manitoba’s self‐sufficiency in road export movement, an apparent lack of such self‐sufficiency for Saskatchewan and Alberta, and a significant usage of Manitoba as the portal for prairie exports (Figures 5.16 and 5.17), a “Trucking Weight Surplus/Deficit” construct was developed (Figure 5.19). This value is created by netting out a province’s road‐based exports with the road‐based exports exiting Canada via that province. For example, almost 1 million more tonnes left via Manitoba’s ports than could be accounted by Manitoba’s road‐based exports. In contrast, 1.3 million tonnes of Alberta’s road‐based exports were not able to leave directly through Alberta’s road infrastructure, rather requiring the use of other provinces’ roads. A lesser deficit of 242,000 tonnes was calculated for Saskatchewan. It is likely this value would have been much higher had it not been for the propensity to use rail rather than road for Saskatchewan exports.

140

Figure 5.19: 2006 Prairie Provinces’ Export Trucking Weight Surplus/Deficit

(Exported by Truck From Prairies ‐ 8.46 Million Tonnes)

9.78

‐2.42

‐13.04

‐15 ‐10 ‐5 0 5 10

Alberta

Saskatchewan

Manitoba

Hundred Thousand Tonnes

15

Figure 5.19 presents a “net” view of the use of road infrastructure of the Prairie provinces. The following table presents the provincial/territorial relationships in more detail Table 5.6 illustrates the departure province distribution of the tonnage of province or territories’ exports. For example, Alberta exported 4,206,000 tonnes by road in 2006, of which 2,532,000 tonnes (60.2%) left through Alberta’s own road portals. A significant share (639,000 tonnes or 15.2% of Alberta‐sourced road exports) left via Saskatchewan’s roads.

141

Table 5.6: 2006 Road Exports of Key Provinces Province of Origin

Departing Province (Below ∨) AB BC MB ON SK Other

ALBERTA 2,532 55 33 82 171 29 Pct of (COLUMN)‐sourced road Exports leaving via AB 60.2% 0.9% 1.2% 0.2% 8.4% 0.1%

BRITISH COLUMBIA 215 5,721 29 175 30 38 Pct of (COLUMN)‐sourced road Exports leaving via BC 5.1% 91.2% 1.0% 0.5% 1.5% 0.2%

MANITOBA 379 146 2,404 208 608 18 Pct of (COLUMN)‐sourced road Exports leaving via MB 9.0% 2.3% 86.4% 0.6% 29.9% 0.1%

ONTARIO 369 159 176 32,429 249 10,305 Pct of (COLUMN)‐sourced road Exports leaving via ON 8.8% 2.5% 6.3% 96.5% 12.2% 47.5%

SASKATCHEWAN 639 86 118 49 895 4 Pct of (COLUMN)‐sourced road Exports leaving via SK 15.2% 1.4% 4.2% 0.1% 44% 0.0%

OTHER PROV/TERR 72 105 25 663 80 11,293 Pct of (COLUMN)‐sourced road Exports leaving via OTHER 1.7% 1.7% 0.9% 2.0% 3.9% 52.1%

Total Exports Sourced from Province, regardless of Province of Departure (,000 tonnes)

4,206 6,272 2,784 33,605 2,034 21,686

100% 100% 100% 100% 100% 100% Manitoba’s road exports totaled 2,784,000 tonnes in 2006, of which the vast majority (2,404,000 tonnes or 86.4%) departed Canada from Manitoba’s own roads. Ontario carried 6.3% of Manitoba’s exports (176,000 tonnes), followed by Saskatchewan, which facilitated the departure of 118,000 tonnes of Manitoba’s exports, or 4.2%. Less than half (44%) of Saskatchewan’s 2,034,000 tonnes of exports left directly via Saskatchewan’s own roads. Manitoba’s roads carried 29.9% of Saskatchewan’s 2006 road exports out of the country. A further 12.2% of Saskatchewan’s road‐based exports departed Canada via Ontario’s roads. Figure 5.19 may give the impression that the large Manitoba surplus is as a result of a large amount of exports being trucked from Alberta to Manitoba and then being exported via Manitoba. However, Table 5.6 reveals a more complex relationship, and more of an “ice cube tray” effect. Alberta only ships 379,000 tonnes of road exports through Manitoba, but ships 639,000 tonnes via Saskatchewan. Saskatchewan, in turn, ships 608,000 tonnes via Manitoba. As the “ice cube tray” tilts to the east, “water” (commodities) pours out of Alberta into Saskatchewan, which is itself in the process of pouring into Manitoba in order to facilitate truck trade southward.

142

Table 5.7 illustrates a different perspective on the data, presenting province or territories’ exports leaving Canada as percentages of shipments via an identified province’s infrastructure.

Table 5.7: 2006 Exports Leaving Canada by Province of Exit Province of Exit Originating Province

(Below ∨) AB BC MB ON SK Other

ALBERTA 2,532 215 379 369 639 72 Pct of Road Exports leaving via (COLUMN) originating in AB 87.3% 3.5% 10.1% 0.8% 35.7% 0.6%

BRITISH COLUMBIA 55 5,721 146 159 86 105 Pct of Road Exports leaving via (COLUMN) originating in BC 1.9% 92.2% 3.9% 0.4% 4.8% 0.8%

MANITOBA 33 29 2,404 176 118 25 Pct of Road Exports leaving via (COLUMN) originating in MB 1.1% 0.5% 63.9% 0.4% 6.6% 0.2%

ONTARIO 82 175 208 32,429 49 663 Pct of Road Exports leaving via (COLUMN) originating in ON 2.8% 2.8% 5.5% 74.2% 2.7% 5.4%

SASKATCHEWAN 171 30 608 249 895 80 Pct of Road Exports leaving via (COLUMN) originating in SK 5.9% 0.5% 16.2% 0.6% 50% 0.7%

OTHER PROV/TERR 29 38 18 10,305 4 11,293 Pct of Road Exports leaving via (COLUMN) originating in “OTHER” 1.0% 0.6% 0.5% 23.6% 0.2% 92.3%

Total Exports leaving via Province (,000 tonnes) 2,901 6,208 3,763 43,686 1,791 12,238

100% 100% 100% 100% 100% 100% Total Exports Sourced from Province, regardless of Province of Departure (,000 tonnes) (From Table 5.6A)

4,206 6,272 2,784 33,605 2,034 21,686

Total Exports leaving via Province as pct of Province’s Own Exports 69% 99% 135% 130% 88% 56%

Provincial Road Infrastructure Surplus or Deficit (,000 tonnes) ‐1,304 ‐64 978 10,081 ‐243 ‐9,448

Main Beneficiaries of Port Provinceʹs infrastructure

AB, SK BC, AB, ON

MB, SK, AB, ON,

BC

ON, QC (in

ʺOtherʺ)

SK, AB, MB, BC

“Other”, ON

For example, regardless of originating province, a total of 2,901,000 tonnes leave via Alberta’s roads. Of this total, 2,532,000 tonnes (87.3%) originated in Alberta. Very few other provinces use Alberta’s roads to a significant extent in facilitating their exports. For example, 171,000 tonnes, or 5.9% of tonnage leaving via Alberta’s roads originated in Saskatchewan. No other province or territory shipped more than 82,000 tonnes through Alberta.

143

At the other end of the scale, Ontario is the major facilitator of others’ road exports, with 25.8% (11,258,000 tonnes) of non‐Ontario sourced exports leaving via Ontario’s roads. Most of this tonnage was sourced from Quebec. Comparing totals in Tables 5.6 and 5.7, it is clear that the tonnage leaving Canada via Ontario (Table 5.7’s 43.7 million tonnes) greatly exceeds the road exports originating in Ontario (Table 5.6’s 33.6 million tonnes). This 30% gap is indicative of the degree to which other provinces and territories benefit from the road infrastructure of Ontario in facilitating their exports. Interestingly, one province’s percentage gap is greater than Ontario’s. At 35%, other provinces’ usage of Manitoba’s road infrastructure is proportionately greater than that of others’ use of Ontario’s infrastructure. Of the 3,763,000 tonnes leaving via Manitoba’s roads, only 2,404,000 tonnes were sourced from Manitoba. Manitoba’s total road exports, regardless of province of departure, fall 978,000 tonnes short of total tonnage leaving via Manitoba’s roads. In 2006, no other western province had a road freight weight surplus (i.e. tonnage leaving via Manitoba exceeds tonnage sourced in Manitoba). One could argue that, on balance, other western provinces benefit from the presence of Manitoba’s road infrastructure to a greater extent than Manitoba benefits from the other western provinces’ road infrastructure (at least in terms of facilitating international road‐based exports).

144

Figure 5.20: 2006 Prairie Provinces’ Export Rail Weight Surplus/Deficit

(Exported by Rail From Prairies ‐ 18.71 Million Tonnes)

‐132.15

‐10.02

18.13

‐140 ‐120 ‐100 ‐80 ‐60 ‐40 ‐20 0 20 40

Alberta

Saskatchewan

Manitoba

Hundred Thousand Tonnes

When all provinces’ exports by rail are viewed, only Manitoba and Ontario have net rail surpluses (by weight), such that rail departing from Ontario and Manitoba exceeds the weight of those provinces’ own exports leaving by rail. Manitoba (and Canada in general) is a trade‐based economy and gains significantly from markets outside its borders. However, it would appear that other provinces may gain significantly, and disproportionately, from access to markets through Manitoba’s transportation infrastructure.

145

146

Domestic Trade

The previous sections have dealt with the international aspect of trade, and Manitoba’s role in facilitating that trade. The following section deals with rail and truck commodity traffic flowing through Manitoba and other provinces, but with a domestic focus. The statistics presented are from 2001‐2005, the most current data available for both modes. All figures presented are in reference to weight (tonnes) as dollar amounts were not available from 2001‐2005 for both modes. The figures in this section represent only commodity traffic flows between and within provinces and do not take into consideration commodity traffic flows to and from the U.S. and Mexico. This section assumes that all rail and truck flows between provinces follow a linear East‐West and West‐East movement.

Rail Commodity Traffic Flows

Figure 5.21 displays the breakdown of rail traffic flows in and through Manitoba from 2001‐2005. Intraprovincial flows originate in Manitoba and are destined for Manitoba locations, MB‐Origin flows originate in Manitoba and are destined for other provinces, MB‐Destination flows originate in other provinces and are destined for Manitoba, and Eastbound and Westbound flows originate in other provinces and are destined for other provinces.

Figure 5.21: Rail Traffic Flows In/Through Manitoba, 2001‐2005 (by Weight)

0

5,000

10,000

15,000

20,000

25,000

Westbound Eastbound Intraprovincial MB‐Origin MB‐Destination

Tonnes(000)

2001 2002 2003 2004 2005

147

In 2005, the majority of rail traffic flows in Manitoba (around 86%) originated in other provinces. About 14% of the rail traffic flows originated in Manitoba. Most of the rail traffic originating in other provinces is not destined for Manitoba, as most of it is flow through traffic. Eastbound traffic makes up the largest percentage of rail traffic flows in Manitoba at 52% or approximately 21.19 million tonnes, while westbound traffic comprises 24% of rail traffic flows in Manitoba or about 9.75 million tonnes. Figures 5.22, 5.23, and 5.24 show the breakdown of rail traffic flows in and through Saskatchewan, Alberta, and Ontario from 2001‐2005.

Figure 5.22: Rail Traffic Flows In/Through Saskatchewan, 2001‐2005 (by Weight)

0

5,000

10,000

15,000

20,000

25,000

30,000

Westbound Eastbound Intraprovincial SK‐Origin SK‐Destination

Tonnes(000)

2001 2002 2003 2004 2005

148

Figure 5.23: Rail Traffic Flows In/Through Alberta, 2001‐2005 (by Weight)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Westbound Eastbound In provincial AB‐Origin AB‐Destination

Tonnes(000)

tra

2001 2002 2003 2004 2005

Figure 5.24: Rail Traffic Flows In/Through Ontario, 2001‐ 2005 (by Weight)

0

5,000

10,000

15,000

20,000

25,000

30,000

Westbound Eastbound Intraprovincial ON‐Origin ON‐Destination

Tonnes(000)

2001 2002 2003 2004 2005

The majority of rail commodity traffic originates in Saskatchewan and Alberta, while eastern Canada is the destination for the majority of commodities. This reflects the fact that the majority of rail traffic flows from 2005 in Manitoba (52%) are Eastbound flows as the western provinces use Manitoba as a conduit to supply the eastern provinces. While Saskatchewan and Alberta experienced flow through traffic of 47% and 42% respectively, flow through traffic in Ontario accounts for only 16% of its total rail traffic flows. Manitoba by far experiences the largest amount of flow through traffic at 76% of its total rail traffic flows. Table 5.8 displays the average westbound and eastbound rail traffic flows through Canadian provinces in 2005. Westbound and eastbound traffic represents only flow through traffic, which is traffic originating in other provinces and destined for other provinces. Manitoba is the most affected by flow through rail traffic, with 30.94 million tonnes flowing through the province, almost 70% of which was eastbound traffic. Saskatchewan and Alberta experienced flow through traffic of 24.03 million tonnes and 28.60 million tonnes respectively, while Ontario experienced a lower total of 9.58 million tonnes.

Table 5.8: Rail Traffic Flows Through Canadian Provinces, 2005 Tonnes (000)

Province MB SK AB ON QUE Westbound 9,749 10,112 19,888 3,148 1,526 Eastbound 21,191 13,917 8,715 6,432 2,112 Total Flow Through 30,940 24,029 28,603 9,580 3,638 % Westbound 32% 42% 70% 33% 42% % Eastbound 68% 58% 30% 67% 58% Total Traffic 40,762 51,816 69,228 57,991 52,891

149

150

Figure 5.25 shows the rail traffic flows in and through Manitoba, by originating province in 2005.

Figure 5.25: Rail Traffic Flows In/Through Manitoba, by Originating Province, 2005 (by Weight)


12.7%

21.6%

10.1%

20.3%17.1%

6.3%

1.1%

3.4%

2.9%

0.9%2.3%

0.8%

0.6%0.1%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

MB SK AB BC ON QUE ATL

Destined for other provinces Destined for MB

Only 13.8% of rail traffic flows originated in Manitoba during 2005 with 1.1% of that being intraprovincial traffic flow. The province with the largest contribution to rail traffic flows in Manitoba was Saskatchewan at 25.0% with 21.6% of that being flow through traffic destined for Ontario, Quebec, and Atlantic Canada. Ontario and B.C. contributed 19.4% and 21.2% to rail traffic flows in Manitoba, while Alberta accounted for 13.0%. Westbound rail commodity traffic flowing through Manitoba in 2005 represented approximately 9.75 million tonnes or 24% of rail traffic flows in Manitoba. Westbound movement comprises commodity shipments from Atlantic Canada, Quebec, and Ontario destined for Saskatchewan, Alberta, and British Columbia.

151

Figure 5.26 displays the westbound rail commodity traffic flowing through Manitoba from 2001‐2005.

Figure 5.26: Westbound Rail Traffic Flowing Through Manitoba, Destined for SK, AB, BC, 2001‐2005 (by Weight)

SK SKSK

AB

AB

AB

BC

BC

BC

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

ATL QUE ON

Origin

2001 2002 2003 2004 2005

In 2005, the majority of the westbound rail traffic flowing through Manitoba originated in Ontario weighing approximately 6.96 million tonnes. Ontario to Alberta accounted for the highest traffic amount at 38.5%, while Ontario to B.C. accounted for the second highest at 28.9%. The largest commodity shipments in terms of weight from Ontario to Alberta were mixed loads or unidentified freight, phosphate rock, and iron and steel. Ontario to B.C. commodity shipments main contributors were mixed loads or unidentified freight, wood pulp, and iron and steel. Quebec to B.C. traffic comprised the third largest segment at 16.4% or 1.60 million tonnes. Eastbound rail commodity traffic flowing through Manitoba in 2005 represented approximately 21.19 million tonnes or 52% of rail traffic flows in Manitoba. Eastbound movement comprises commodity shipments from Saskatchewan, Alberta, and British Columbia destined for Atlantic Canada, Quebec, and Ontario.

152

Figure 5.27 displays the eastbound rail commodity traffic flowing through Manitoba from 2001‐2005.

Figure 5.27: Eastbound Rail Traffic Flowing Through Manitoba, Destined for ATL, QUE, ON, 2001‐2005 (by Weight)

ATL ATL ATL

QUE QUE

QUE

ON

ON

ON

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

SK AB BC

Origin

2001 2002 2003 2004 2005

In 2005, Saskatchewan to Ontario traffic comprised approximately 33.9% or 7.17 million tonnes of eastbound rail traffic flowing through Manitoba. The bulk of commodities shipped from Saskatchewan to Ontario were made up of wheat at around 3.27 million tonnes, followed by coal at around 1.30 million tonnes. B.C. to Ontario and Alberta to Ontario comprised 25.4% and 13.3% of eastbound rail traffic flowing through Manitoba. In total, 72.6% or 15.37 million tonnes of eastbound rail traffic was destined for Ontario in 2005, while 41.6% or 8.81 million tonnes of eastbound rail traffic originated in Saskatchewan.

153

Truck Commodity Traffic Flows

Figure 5.28 displays the breakdown of truck traffic flows in and through Manitoba from 2004‐2005. Intraprovincial flows originate in Manitoba and are destined for Manitoba locations, MB‐Origin flows originate in Manitoba and are destined for other provinces, MB‐Destination flows originate in other provinces and are destined for Manitoba, and Eastbound and Westbound flows originate in other provinces and are destined for other provinces.

Figure 5.28: Truck Traffic Flows in/through Manitoba 2004‐2005 (by Weight)

0

2,000

4,000

6,000

8,000

10,000

12,000

Westbound Eastbound Intraprovincial MB‐Origin MB‐Destination

Tonnes (000)

2004 2005

Approximately 45% of truck traffic in Manitoba originated in other provinces in 2005. About 17% of truck traffic flows were destined for Manitoba, while flow through traffic was comprised of 28%, westbound at 20% and eastbound at 8%. Intraprovincial traffic flows accounted for the largest portion of truck commodity traffic flows in Manitoba at 42% or 9.70 million tonnes.

154

Figures 5.29, 5.30, and 5.31 show the breakdown of truck traffic flows in and through Saskatchewan, Alberta, and Ontario from 2004‐2005.

Figure 5.29: Truck Traffic Flows in/through Saskatchewan, 2004‐2005 (by Weight)

0

5,000

10,000

15,000

20,000

25,000

Westbound Eastbound Intraprovincial SK‐Origin SK‐Destination

Tonnes (000)

2004 2005

Figure 5.30: Truck Traffic Flows in/through Alberta, 2004‐2005 (by Weight)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Westbound Eastbound Intraprovincial AB‐Origin AB‐Destination

Tonnes (000)

2004 2005

155

Figure 5.31: Truck Traffic Flows in/through Ontario, 2004‐2005 (by Weight)

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

Westbound Eastbound Intraprovincial ON‐Origin ON‐Destination

Tonnes (000)

2004 2005

Truck commodity traffic flows in Saskatchewan mirror the traffic flows in Manitoba, with both provinces experiencing similar flow through traffic of 28% for Manitoba and 23% for Saskatchewan. Truck traffic flows in Alberta and Ontario are comprised largely of intraprovincial traffic flows. Flow through truck traffic accounts for 3% of Alberta’s total truck traffic flows, while in Ontario flow through traffic comprises just over 1% of its total truck commodity traffic flow. Table 5.9 displays the westbound and eastbound truck traffic flows through Canadian provinces in 2005. Westbound and eastbound traffic represents only flow through traffic, which is traffic originating in other provinces and destined for other provinces. Saskatchewan and Manitoba are the most affected by flow through truck traffic. Saskatchewan experiences 8.58 million tonnes flowing through the province annually, while Manitoba is second among provinces at 6.78 million tonnes. Quebec experiences flow through traffic of 3.84 million tonnes, while Alberta and Ontario experience 3.47 million tonnes and 1.96 million tonnes respectively.

Table 5.9: Truck Traffic Flows Through Canadian Provinces, 2005 Tonnes (000)

Province MB SK AB ON QUE Westbound 4,778 5,290 2,223 1,078 1,502 Eastbound 2,001 3,289 1,251 882 2,342 Total Flowthrough 6,779 8,579 3,474 1,960 3,844 % Westbound 70% 62% 64% 55% 39% % Eastbound 30% 38% 36% 45% 61% Total Traffic 23,575 37,050 108,478 213,632 121,428

The discrepancy between Saskatchewan and Manitoba’s numbers is due to the fact that Manitoba to Alberta and B.C. shipments and conversely Alberta and B.C. to Manitoba shipments comprise a larger amount than eastern Canada to Saskatchewan shipments and Saskatchewan to eastern Canada shipments. Shipments from Alberta and B.C. destined for Manitoba, flowing through Saskatchewan were 1.58 million tonnes. Shipments from Atlantic Canada, Quebec, and Ontario destined for Saskatchewan, flowing through Manitoba were 0.44 million tonnes. Figure 5.32 shows the truck traffic flows in Manitoba, by originating province in 2005.

Figure 5.32: Truck Traffic Flows in/through Manitoba, by Originating Province, 2005 (by Weight)


12.9%4.6% 2.7%

16.5%

3.4%

41.1%

5.1%

4.1%

0.4%1.3%

0.1%0.7%1.6%5.6%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

MB SK AB BC ON QUE ATL

Destined for other provinces Destined for MB

156

157

Approximately 54% of truck commodity traffic flows in Manitoba originated within the province with 41.1% being intraprovincial traffic. Ontario was the second largest contributor to traffic flows in Manitoba at 20.6% with 16.5% of that being flow through traffic destined for Saskatchewan, Alberta, and B.C. Alberta contributed 9.7%, while Saskatchewan comprised 6.9% of the total truck traffic flows in Manitoba. About 42% of truck commodity traffic flowing in and through Manitoba is destined for other provinces, while 28% of the traffic is flow through traffic between the western and eastern provinces. Westbound truck commodity traffic flowing through Manitoba in 2005 represented approximately 4.78 million tonnes or 20% of truck traffic flows in Manitoba. Westbound movement comprises commodity shipments from Atlantic Canada, Quebec, and Ontario destined for Saskatchewan, Alberta, and British Columbia. Figure 5.33 displays the westbound truck commodity traffic flowing through Manitoba from 2001‐2005.

Figure 5.33: Westbound Truck Traffic Flowing Through Manitoba, Destined for SK, AB, BC, 2001‐2005 (by Weight)

SK

SKSK

AB

AB

AB

BC

BC

BC

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

ATL QUE ON

Origin

2001 2002 2003 2004 2005

In 2005, Commodity shipments from Ontario to Saskatchewan, Alberta, and B.C. comprised 81.4% of westbound truck traffic flowing through Manitoba. Ontario to Alberta traffic was the highest at 45.8% or 2.19 million tonnes, while Ontario to B.C. traffic comprised 28.1% or 1.34 million tonnes. The largest commodity shipments in terms of weight from Ontario to Alberta were miscellaneous transported products,

158

prepared foodstuffs, fats, and oils, and wood products. Ontario to B.C. commodity shipments main contributors were products of petroleum refining, miscellaneous transported products, prepared foodstuffs, fats, and oils, and meat, fish, seafood and preparations. Eastbound truck commodity traffic flowing through Manitoba in 2005 represented approximately 2.00 million tonnes or 8% of truck traffic flows in Manitoba. Eastbound movement comprises commodity shipments from Saskatchewan, Alberta, and British Columbia destined for Atlantic Canada, Quebec, and Ontario. Figure 5.34 displays the eastbound truck commodity traffic flowing through Manitoba from 2001‐2005.

Figure 5.34: Eastbound Truck Traffic Flowing Through Manitoba, Destined for ATL, QUE, ON, 2001‐2005 (by Weight)

ATLATL

ATLQUE

QUE

QUE

ON

ON

ON

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

SK AB BC

Origin

2001 2002 2003 2004 2005

In 2005, Ontario was the principle destination for eastbound truck traffic flowing through Manitoba. 67.4% of the eastbound truck commodity traffic was destined for Ontario, while 24.6% of the eastbound commodity traffic was destined for Quebec. Alberta to Ontario and B.C. to Ontario traffic made up the largest portion of eastbound traffic at 34.8% (0.70 million tonnes) and 24.3% (0.49 million tonnes) respectively. The largest commodity shipments from Alberta to Ontario in terms of weight were miscellaneous transported products, meat, fish, seafood and preparations, and wood products. B.C. to Ontario commodity shipments were led by miscellaneous transported products, agricultural products, and meat, fish, seafood and preparations.

Mid‐Continent Corridor Trade

Manitoba is positioned as the most northern point in the Mid Continent Corridor. The corridor which links Canada, the United States, and Mexico, is a system of connecting highways and railroads that facilitate trade between the three countries. The US portion of the corridor is comprised of 13 states. The U.S. Mid‐Continent Corridor states are: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma, South Dakota, Texas, and Wisconsin. Exports57 Figure 5.35 displays exports by rail from Manitoba to the 13 corridor states from 2002‐2006 in dollars.

Figure 5.35: Manitoba Exports to US Corridor States, by Rail

(dollars)

$951,458,037

$1,109,588,682

$991,742,624$1,080,432,214

$850,670,127

62.1%64.8%

61.5%60.8% 58.9%

$‐

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

$1,400,000,000

$1,600,000,000

2002 2003 2004 2005 2006

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

$CDN % of MB Rail Exports to US

Exports destined for the 13 corridor states maintained a fairly stable level from 2002‐2006 averaging $997 million over the five year period. The percent of total rail exports from Manitoba to the US remained stable as well, declining only 2.7% from 2002 to 2006.

57 Exports refer to goods which depart through Manitoba borders. Some of these goods originate in other Canadian provinces.

159

160

Figure 5.36 shows the distribution of Manitoba exports by rail to the corridor states from 2002‐2006 in terms of dollars.

Figure 5.36: Distribution of Manitoba Exports to US Corridor States, by Rail

(dollars)

$‐

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

IL IN IA KS MI MN MO NE ND OK SD TX WI

$CDN

2002 2003 2004 2005 2006

As shown in Figure 5.36, a large portion of Manitoba rail exports are destined for Illinois and Minnesota. In 2006, Minnesota received over $266 million worth of exports from Manitoba while Illinois received $213 million. Missouri, North Dakota, Texas, and Wisconsin show the next highest amount of exports in terms of value.

161

Figure 5.37 displays exports by rail from Manitoba to the 13 corridor states from 2002‐2006 in kilograms.

Figure 5.37: Manitoba Exports to US Corridor States, by Rail

(kilograms)

3,487,106,0973,214,594,734

3,266,482,569

3,501,595,631

2,919,901,166 66.6%67.9% 66.8%

63.7%65.2%

0

400,000,000

800,000,000

1,200,000,000

1,600,000,000

2,000,000,000

2,400,000,000

2,800,000,000

3,200,000,000

3,600,000,000

4,000,000,000

2002 2003 2004 2005 2006

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Kilograms % of MB Rail Exports to US

Manitoba exports to corridor states by weight followed a pattern similar to the value trend. The average over the five year period came to 3,278 million kilograms which was very close to the 2006 value of 3,267 million kilograms. The percentage of rail exports to corridor states also changed very little maintaining an average of 66% over the measured period.

162

Figure 5.38 shows the distribution of Manitoba exports by rail to the corridor states from 2002‐2006 in terms of weight.

Figure 5.38: Distribution of Manitoba Exports to US Corridor States, by Rail

(kilograms)

0

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

1,400,000,000


Kilograms

2002 2003 2004 2005 2006 On average, the majority of exports in terms of weight were destined for Minnesota and Illinois. 2006 saw Illinois experience a substantial drop from just over 1 billion kilograms in 2005 to 331 million kilograms in 2006. In 2006, Minnesota was the principal destination for exports at 1,258 million kilograms followed by North Dakota at 388 million kilograms.

163

Figure 5.39 displays Manitoba exports by road to the 13 corridor states from 2002‐2006 in terms of dollars.

Figure 5.39: Manitoba Exports to US Corridor States, by Road

(dollars)

$4,241,606,647

$4,391,921,966$4,565,841,933$4,398,137,514

$5,055,882,736

58.6%62.2%63.7%63.5%66.7%

$‐

$1,000,000,000

$2,000,000,000

$3,000,000,000

$4,000,000,000

$5,000,000,000

$6,000,000,000

2002 2003 2004 2005 2006

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

$CDN % of MB Road Exports to US

Exports to corridor states by road showed a steady decrease from 2002‐2006, falling around $814 million over the past five years. Similarly, the percentage of exports destined for corridor states declined steadily from 66.7% in 2002 to 58.6% in 2006.

164

Figure 5.40 displays the distribution of Manitoba exports by road to the 13 corridor states from 2002‐2006 in terms of dollars.

Figure 5.40: Distribution of Manitoba Exports to US Corridor States, by Road

(dollars)

$‐

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

$1,400,000,000


$CDN

2002 2003 2004 2005 2006

Six states received the majority of road exports in terms of dollars. Illinois, Iowa, Minnesota, North Dakota, Texas, and Wisconsin comprised 74% of Manitoba exports to corridor states. While experiencing a decline from 2002’s total of $1,285 million, Minnesota still topped the list in 2006 totaling around $872 million.

165

Figure 5.41 shows Manitoba exports by road to the 13 corridor states from 2002‐2006 in terms of weight.

Figure 5.41: Manitoba Exports to US Corridor States, by Road

(kilograms)

2,953,725,185 2,904,083,8243,107,414,253

2,927,620,251 2,801,348,545

80.2% 78.8% 79.2%75.9% 76.4%

0

1,000,000,000

2,000,000,000

3,000,000,000

4,000,000,000

5,000,000,000

2002 2003 2004 2005 2006

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Kilograms % of MB Road Exports to US

Exports from 2002‐2006 maintained consistent levels. The average for this time period was 2,939 million kilograms which is slightly above the 2006 total. The percent of exports destined for corridor states remained between 76% and 80% over the five year period.

166

Figure 5.42 displays the distribution of Manitoba exports by road to the 13 corridor states from 2002‐2006 in terms of weight.

Figure 5.42: Distribution of Manitoba Exports to US Corridor States, by Road

(kilograms)

0

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000

700,000,000

800,000,000

900,000,000

1,000,000,000


Kilograms

2002 2003 2004 2005 2006

Minnesota and North Dakota obtained 50% of Manitoba exports to corridor states in 2006. Illinois, Iowa, South Dakota, and Wisconsin had the next highest totals representing a combined total of 29% of Manitoba exports to corridor states in 2006.

Imports58 Figure 5.43 displays Manitoba imports by rail from the 13 corridor states in terms of dollars.

Figure 5.43: Manitoba Imports from US Corridor States, by Rail

(dollars)

$188,877,371

$288,089,877

$224,367,246

$219,349,477

$185,295,701

50.4%

55.6%

47.6%50.6%

42.5%

$‐

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

2002 2003 2004 2005 2006

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

$CDN % of MB Rail Imports from US

Imports by rail are considerably less than exports by rail for Manitoba. While imports saw some fluctuations over the five year period, the average of $221 million is very close to the 2006 number of $224 million. The percent of imports to Manitoba from corridor states decreased from a peak of 55.6% in 2003 to 42.5% in 2006.

58 Imports refer to goods that are cleared through Manitoba borders. Some of these goods may be destined for other provinces.

167

168

Figure 5.44 shows the distribution of Manitoba imports by rail from the 13 corridor states in terms of dollars.

Figure 5.44: Distribution of Manitoba Imports from US Corridor States, by Rail

(dollars)

$‐

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

$90,000,000


$CDN

2002 2003 2004 2005 2006

Imports from Texas increased consistently from 2002 ($28 million) to 2006 ($64 million) and was the leading origin of imports to Manitoba of all the corridor states. Despite declining by nearly $20 million from 2005 to 2006, the next highest amount of imports came from Illinois. Michigan was the third leading contributor in 2006 at $29 million which was a large decrease from the 2005 total of around $77 million.

169

Figure 5.45 displays Manitoba imports by rail from the 13 corridor states in terms of weight.

Figure 5.45: Manitoba Imports from US Corridor States, by Rail

(kilograms)

683,506,691

1,748,309,314

1,482,921,138

802,365,453864,872,147

60.8%

75.4%

54.9%

74.6%

83.0%

0

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

1,400,000,000

1,600,000,000

1,800,000,000

2,000,000,000

2002 2003 2004 2005 2006

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

Kilograms % of MB Rail Imports from US

After declining to a low of 684 million kilograms in 2004, imports jumped substantially in 2006 reaching a high of 1,748 million kilograms. The percent of imports originating in corridor states declined from 83% in 2002 to 61% in 2006 despite overall imports actually increasing.

170

Figure 5.46 shows the distribution of Manitoba imports by rail from the 13 corridor states in terms of weight.

Figure 5.46: Distribution of Manitoba Imports from US Corridor States, by Rail

(kilograms)

0

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000

700,000,000

800,000,000


Kilograms

2002 2003 2004 2005 2006

After posting a total just under 4 million kilograms in 2004, imports from Kansas increased in each of the next two years reaching 685 million kilograms in 2006 to lead the way in terms of weight based imports. Kansas, along with Minnesota, Iowa, and Illinois comprised 88% of the imports to Manitoba from corridor states in 2006.

171

Figure 5.47 displays Manitoba imports by road from US corridor states in terms of dollars.

Figure 5.47: Manitoba Imports from US Corridor States, by Road

(dollars)

$4,556,655,780$4,351,962,120 $4,487,370,399

$5,172,799,882$5,497,487,072

61.4% 61.4% 60.7% 61.8% 61.2%

$‐

$1,000,000,000

$2,000,000,000

$3,000,000,000

$4,000,000,000

$5,000,000,000

$6,000,000,000

2002 2003 2004 2005 2006

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

$CDN % of MB Road Imports from US

Imports by road steadily increased over the five year period. From 2002‐2006 imports in terms of dollars increased by over $940 million. The percentage of imports from corridor states remained very stable over the illustrated period fluctuating only 1% from 2002‐2006.

172

Figure 5.48 shows the distribution of Manitoba imports by road from the 13 corridor states in terms of dollars.

Figure 5.48: Distribution of Manitoba Imports from US Corridor States, by Road

(dollars)

$‐

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

$1,400,000,000


$CDN

2002 2003 2004 2005 2006

Six states provided the majority of Manitoba imports by road from the corridor states in 2006. Illinois, Indiana, Iowa, Minnesota, Texas, and Wisconsin contributed 78% of total Manitoba imports. As was the case in Figure 5.47, Manitoba imports from corridor states showed a steady increase over the five year period.

173

Figure 5.49 displays Manitoba imports by road from US corridor states in terms of weight.

Figure 5.49: Manitoba Imports from US Corridor States, by Road

(kilograms)

2,711,014,2722,543,546,417

2,723,246,777

3,028,078,507

3,924,064,549

75.7% 75.4%72.1% 69.7% 71.4%

0

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

2,500,000,000

3,000,000,000

3,500,000,000

4,000,000,000

4,500,000,000

2002 2003 2004 2005 2006

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Kilograms % of MB Imports from US

Imports by weight experienced a steady increase from 2003 to 2006, rising approximately 1,380 million kilograms over the four year period. Overall, the percent of imports from corridor states only slightly declined by 4.3% from 2002 to 2006.

174

Figure 5.50 shows the distribution of Manitoba imports by road from the 13 corridor states in terms of weight.

Figure 5.50: Distribution of Manitoba Imports from US Corridor States, by Road

(kilograms)

0

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

1,400,000,000

1,600,000,000

1,800,000,000


Kilograms

2002 2003 2004 2005 2006

Similar to Manitoba road exports by weight, road imports by weight were led by Minnesota and North Dakota. Minnesota maintained consistent levels from 2002 to 2005, and then increased substantially in 2006 to 1,568 million kilograms. Illinois was the third largest contributor of imports with 396 million kilograms in 2006.

6.0 Federal Revenues and Expenditures

This section is a summary of the report Federal Transportation Spending and Revenues (2008). Both this section and the larger report focus on the level of transportation spending and revenues generated by the various levels of the Canadian government. The report covers the period of time between 1987/88 and 2005/06. In addition, the report also provides a 5 year forecast of federal spending and revenue collection until the year 2010/11. All figures have been adjusted for inflation and are reported in 2005/06 dollars. In fiscal 2005/06 the federal transportation surplus was $2.1 billion dollars. This was a decrease of $500 million from 2004/05 and continues an ongoing trend. Figure 6.1 presents a summary of federal transportation surpluses/deficits beginning in 1987/88.

Figure 6.1: Federal Transportation Surplus/Deficit, 1987/88 to 2010/11

$31 $176 $285 $607

$2,339

$1,915

$3,144

$3,264

$3,107

$2,798

$3,022

$2,791

$2,612

$2,112

$1,919

$1,635

$1,350

$1,065

$780

‐$1,530

‐$1,674

‐$1,700

‐$532

‐$704

‐$2,000

‐$1,000

$0

$1,000

$2,000

$3,000

$4,000

87/88

88/89

89/90

90/91

91/92

92/93

93/94

94/95

95/96

96/97

97/98

98/99

99/00

00/01

01/02

02/03

03/04

04/05

05/06

06/07f

07/08f

08/09f

09/10f

10/11f

$ Millions (2005)

The surplus began in 1992/93 with an increase of fuel tax revenues and a decrease in total gross spending, and continued to grow through the decade. The surplus peaked in 1999/00 reaching a value of over $3.2 billion. Following this, the annual surplus has been declining. Based on forecasting, the annual transportation surplus will continue to decline at a gradual level.

175

Federal Spending

In fiscal 2005/06, federal transportation spending was $3.3 billion dollars. During the 1990’s, Transport Canada’s role shifted from operation to administration. During this change, several major agencies that had previously been under the management of Transport Canada were privatized (e.g. NAV Canada, St. Lawrence Seaway, various airports, etc.). Due to this change, spending by Transport Canada decreased significantly in the mid 1990’s and continued to decrease until 2004/05. As spending by Transport Canada decreased, transportation spending by “Other” Federal departments (e.g. Canadian Air Transport Security Authority [CATSA], Fisheries and Oceans [Coast Guard], Public Works Canada, Parks Canada, Indian and Northern Affairs Canada, etc.) has recently increased. Since 2004/05, the majority of transportation spending has been funded by departments other than Transport Canada. Figure 6.2 displays the relative spending on transportation by both Transport Canada and “Other” Federal departments.

Figure 6.2: Relative Spending by Transport Canada and Other Federal Departments, 1987/88 to 2010/11

2004/05 = 100%

0%

50%

100%

150%

200%

250%

300%

350%

400%

87/88

88/89

89/90

90/91

91/92

92/93

93/94

94/95

95/96

96/97

97/98

98/99

99/00

00/01

01/02

02/03

03/04

04/05

05/06

06/07f

07/08f

08/09f

09/10f

10/11f

Index 2004/05 = 100%

Transport Canada

Other Federal Departments

Although forecasts project that spending by Transport Canada will decrease, it will do so at a gradual rate. When presented visually, this decline appears more as a plateau, when compared to historic spending. Spending by “Other” departments will rise sharply, nearly doubling in value over five years (from 2004/05).

176

Federal Revenues

In fiscal 2005/06, $5.4 billion in transportation revenues were collected by the Federal government. Federal transportation revenues are generated by the collection of fuel taxes and non‐fuel taxes (e.g. airport fees, over‐flight fees, harbour and marine safety fees, road safety fees, hopper car leasing, etc.). Figure 6.3 displays the growth of fuel and non‐fuel taxes and total revenue.

Figure 6.3: Total Federal Transportation Revenues, 1987/88 to 2010/11

2004/05 = 100%

0%

25%

50%

75%

100%

125%

150%

175%

200%

225%

87/88

88/89

89/90

90/91

91/92

92/93

93/94

94/95

95/96

96/97

97/98

98/99

99/00

00/01

01/02

02/03

03/04

04/05

05/06

06/07f

07/08f

08/09f

09/10f

10/11f

Index 2004/05 = 100%

Fuel Tax Revenue

Non‐Fuel Tax Revenue

Total Revenue

Both revenue sources have been decreasing since the late 1990’s. Although non‐fuel tax revenues experienced a surge in 2002/03 with the creation of the Air Travelers Security Charge, the revenue level has continued to decrease. Based on historic linear forecasting, fuel tax revenues will decrease at a gradual rate of less than 5% over five years while non‐fuel tax revenues will also decrease, though at a greater level of decline. Overall, forecasts show that (Total) transportation revenues will decrease over the next five years. This will appear as a 10% decrease between 2005/06 and 2010/11. Due to the gradual decrease of fuel taxes, the annual decline of revenues will be less than 2%. A complete analysis of federal transportation revenues and expenditures can be found in the University of Manitoba Transport Institute report titled Federal Transportation Spending and Revenues, a periodic report documenting the fiscal changes to Canada’s federal transportation system, 1987‐2005 and a five year forecast update (2008).

177

7.0 Climate and the Environment

Climate change refers to “changes in long‐term weather patterns caused by natural phenomena and human activities that alter the chemical composition of the atmosphere through the buildup of greenhouse gases” (GHGs).59 Similar to a greenhouse which traps heat, GHGs accumulate in the atmosphere creating a blanket‐like effect that warms the earth. This phenomena known as the greenhouse effect causes the earth’s surface to be roughly 33˚C higher than it would otherwise be.60 There is increasing scientific evidence that anthropogenic activities including aerosol emissions, land‐use changes, and greenhouse gas emissions are affecting the global climate. Warming trends in the last 20th century can be attributed to greenhouse gas emission primarily due to human activities. The list of GHGs includes CH4, N2O, HFCs, PFCs, SF6, and CO2. Carbon dioxide emissions from anthropogenic activities, when compared with natural processes, represent less than 2 percent of total worldwide emissions.61 Evidence suggests, however, that these human‐induced GHG emissions account for the majority of the observed accumulated CO2 in the atmosphere. Human‐induced CO2

concentrations have risen dramatically since pre‐industrial levels from roughly 280 ppm to 379 ppm in 2005.62 The primary sources of human‐induced CO2 emissions include deforestation, industrial processes, and notably, fossil fuel combustion of oil, coal and gas. There are two carbon‐balancing processes, photosynthesis in ecosystems and storage in oceans’ sediments that remove a large amount of atmospheric CO2 .63 The natural carrying capacity of these sinks however, appears to be exceeded, as atmospheric concentrations of CO2 and other GHGs are increasing.64 Once released into the atmosphere, carbon remains in the climate system for a century or longer.65

59 Environment Canada. National Inventory Report 1990‐2005: Greenhouse Gas Sources and Sinks in Canada ‐ The Canadian Governmentʹs Submission to the UN Framework Convention on Climate Change, (April 2007).60 International Institute for Sustainable Development, Manitoba Clean Environment Commission. Manitoba and Climate Change: A Primer. (2001)61 Natural Resources Canada. From Impacts to Adaptation: Canada in a Changing Climate. (March 2008).62 Natural Resources Canada. From Impacts to Adaptation: Canada in a Changing Climate. (March 2008). Chp 2, p.37.63 Ibid 64 Natural Resources Canada. From Impacts to Adaptation: Canada in a Changing Climate. (March 2008).65 International Institute for Sustainable Development, Manitoba Clean Environment Commission. Manitoba and Climate Change: A Primer. (2001)

178

Although Canada is accountable for emitting a mere 2 percent of the world’s GHG emissions, it is one of the highest per capita emitters of all industrial nations.66 Canada emitted nearly 23 tonnes per capita in 2005, which is a 6 percent increase over 1990 levels. When compared to Japan, Canada emitted over double the GHGs per capita in 2005.67 (See Figure 7.1)

Figure 7.1: Per Capital International GHG Emissions (Mt CO2 eq), 1990, 1995, 2000, 2005

0.00

5.00

10.00

15.00

20.00

25.00

30.00

1990 1995 2000 2005

Megatonnes (M

t) of CO2 Equivalent

Canada

U.S.A

Germany

Japan

Australia

The Intergovernmental Panel on Climate Change (IPCC) estimated that the global temperature would increase by 0.2˚C a decade for the next two decades. If GHG emissions are kept constant at year 2000 levels, the global mean temperature would increase by 0.1˚C per decade.68 The IPCC’s Special Report on Emissions Scenarios (SRES) established six global climate change scenarios for the end of this century relative to 1980 and 1990 temperatures, based on the level of action taken by governments, NGOs, and communities. At one extreme of the scale (B1 scenario), which is based on a shift to a service and technology‐based economy combined with a declining dependence on

66 Environment Canada. National Inventory Report 1990‐2005: Greenhouse Gas Sources and Sinks in Canada ‐ The Canadian Governmentʹs Submission to the UN Framework Convention on Climate Change, (April 2007).67 GHG data collected from the United Nations Framework Convention on Climate Change. Population data collected from the U.S. Census Bureau International Data Base. 68 Natural Resources Canada. From Impacts to Adaptation: Canada in a Changing Climate. (March 2008). Chapter 2, Page.40.

179

fossil fuels, the temperature is estimated to increase in the range of 1.1 to 2.9˚C. The best estimate for this scenario is that the world’s temperature should be 1.8 ˚C warmer by the 2090s. At the other end, a fast‐growing global economy, with a heavy emphasis on fossil fuel use reflects an increase in expected global temperature of 2.4 to 6.4˚C. (A1F1 scenario) The IPCC estimates that the global temperature, based on this scenario would likely increase by 4˚C by the end of the century.69 Temperatures in Canada have increased by more than 1.3˚C since 1948, which is twice the global average.70 The greatest temperature changes have been observed in Canada’s north, specifically the Northwest Territories and Yukon.71 When compared to other industrialized countries, with the exception of the United States, Canada’s GHG emissions from the Transportation sector is relatively high. Canada emitted 6.03 tonnes of GHGs per capita in 2005, which is a 12.5 percent increase from 1990 emission levels. (See Figure 7.2) The Transportation industries in Japan and Germany emitted the fewest GHG emissions per capita of the countries listed, suggesting they are have more efficient transportation networks.72

69 Intergovernmental Panel on Climate Change, Special Report on Emissions Scenarios (SRES). (2000). 70 Natural Resources Canada. From Impacts to Adaptation: Canada in a Changing Climate. (March 2008)71 Ibid 72 GHG data collected from the United Nations Framework Convention on Climate Change. Population data collected from the U.S. Census Bureau International Data Base.

180

Figure 7.2: Per Capita International GHG Emissions from the Transportation Sector (Mt CO2 eq), 1990, 1995, 2000, 2005

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

1990 1995 2000 2005

Megatonnes (Mt) of CO2 Equivalent

Canada

U.S.A.

Germany

Japan

Australia

Overall, in 2005 Canada produced 747 Mt of GHGs, excluding GHGs from land use, land‐use change and forestry. (See Figure 7.3) This is a 25 percent increase over 1990 emission levels and equaled the amount emitted in 2004. The Other Energy sector, which comprised of stationary combustion industries and fugitive sources, accounted for 54 percent of all GHG emissions in Canada. The Transportation sector accounted for 27 percent of emissions emitted. The Agricultural sector made up 7 percent of all GHG emissions in 2005, and Waste wound up emitting 4 percent of all GHG emissions.73

In 2005, 20.3 Mt of GHGs were emitted in Manitoba. (See Figure 7.3) In contrast to Canada, the Transportation sector in Manitoba, which accounted for 37 percent, was the largest source of GHGs in the province. The Agricultural industry was the second highest emitter, and was responsible for emitting 30 percent of the total amount.74

Per capita, the GHG emission rate in Canada was 22.7 tonnes in 2005, while in Manitoba it was 17.2 tonnes per capita. This comparison indicates that on average, Manitoba emitted less GHGs than the Canadian average on a per capita basis.75

73 Data collected from Environment Canada. National Inventory Report 1990‐200574 Ibid 75 These figures were derived using 2005 Canadian Census data, and the National Inventory Report, 1990‐2005

181

Figure 7.3: Total GHG Emissions in Canada and Manitoba by Sector (Mt CO2 eq.), 2005

Canada Manitoba

Overall, the Transportation industry in Canada emitted 193 Mt of GHGs in 2005, which is a 26 percent increase from 1990 emission levels. Furthermore, Road Transportation accounted for well over half (70 percent) of all GHGs emitted by the Transportation sector. (See Figure 7.4) Emissions from the Road Transportation sector have risen by 26 percent in 2005 over 1990 levels. (153 Mt) Emissions from Heavy‐Duty Diesel Vehicles (HDDV) increased in this period by nearly 84 percent. (See Figure 7.5) Of particular note, emissions from Light‐Duty Gasoline Trucks (LDGT) rose from 1990 levels by 109 percent, which suggests the popularity of sports utility vehicles. Emissions from Light‐Duty Gasoline Vehicles (LDGV) decreased in this period by nearly 13 percent. GHG emissions from other sectors remained fairly consistent with 1990 levels.76

76 Data collected from Environment Canada. National Inventory Report 1990‐2005

Industrial Processes7%

Agriculture8% Waste

4%

Transportation27%

Other Energy54%

Other Energy26%

Transportation37%

Waste5%

Agriculture30%

Industrial Processes2%

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Figure 7.4: Canada GHG Emission by Mode (Mt CO2 eq.), 1990 and 2005

21%

3%5%

66%

4%

19%

3%3%5%

70%

0

20

40

60

80

100

120

140

160

Total Road Aviation Railways Marine OtherMegatonnes (Mt) of CO2 Equivalent

1990 2005

Figure 7.5: Canada GHG Emissions by Road Transportation (Mt CO2 eq.), 1990 and 2005

3%

8%

1%

21%21%

47%

1%

5%2%

29%

33%31%

05101520253035404550

LDGV LDGT HDDV LDDT HDGV Other Road Megatonnes (Mt) of CO2 Equivalent

1990 2005

LDGV: Light‐Duty Gasoline Vehicles LDGT: Light‐Duty Gasoline Trucks HDDV: Heavy‐Duty Diesel Vehicle HDGV: Heavy‐Duty Gasoline Vehicles

LDDT: Light‐Duty Diesel Trucks Other Road: Motorcycles, Light Duty Diesel Vehicles, Propane and Natural Gas Vehicles

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In Manitoba, Road Transportation accounted for 64% percent of all GHGs emitted by the Transportation sector in 2005, which is a 19 percent increase over 1990 levels. (See Figure 7.6) Similar to Canada, emissions in Manitoba from LDGTs rose by 87 percent in 2005 from 1990 GHG levels. (See Figure 7.7) GHG emissions from HDDVs increased by 80 percent in this period, indicating the increased use of heavy‐duty trucks in Manitoba. Rail emissions decreased by 50 percent in this period. Lastly, emissions from LDGV decreased in this period by 32 percent. Emissions from other sectors remained fairly consistent with 1990 levels.77

Figure 7.6: Manitoba GHG Emissions by Mode (Mt CO2 eq.), 1990 and 2005

31%

8%5%

56%

27%

4%5%

64%

0

1

2

3

4

5

6

Total Road Aviation Railways Marine OtherMegatonnes (Mt) of CO2 Equivalent

1990 2005

77 Data collected from Environment Canada. National Inventory Report 1990‐2005

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Figure 7.7: Manitoba GHG Emissions by Road Transportation (Mt CO2 eq.), 1990 and 2005

42%

22%

1%

11%

2%

24%

35% 34%

2%5%

1%

00.20.40.60.811.21.41.61.8

LDGV LDGT HDDV LDDT HDGV Other Road

Megatonnes (Mt) of CO2 Equivalent

1990 2005

22%

LDGV: Light‐Duty Gasoline Vehicles LDGT: Light‐Duty Gasoline Trucks HDDV: Heavy‐Duty Diesel Vehicle HDGV: Heavy‐Duty Gasoline Vehicles

LDDT: Light‐Duty Diesel Trucks Other Road: Motorcycles, Light Duty Diesel Vehicles, Propane and Natural Gas Vehicles

Today’s climate in Manitoba can be described as cold continental, with short, hot summers, long, cold winters, low amounts of precipitation, and high levels of evaporation. Mean summer temperatures range from 14 to 16˚C, while mean winter temperatures range from ‐12.5 to ‐8˚C.78 Mean precipitation levels are variable, with western regions receiving 300 mm, and nearly 700 mm in the eastern parts of the province.79 The IPCC estimated that, as the climate warms, it is virtually certain that the number of hot days and nights will increase, and the number of cold days and nights will decrease. It was also projected that the likelihood of heat waves, hot extremes, and heavy precipitation events are very likely to occur as the climate changes. Between 2080 and 2100 it is projected that there will be an average of 70 extremely hot days (30˚C+) in Winnipeg per year.80 This is a 367 percent increase over the average number of extremely hot days recorded between 1961 and 1990, with an average of 15 days per year. Of the all the cities studied in this report, Winnipeg is expected to experience more extremely hot days than any of the other Canadian cities listed in the report. 78 International Institute for Sustainable Development, Manitoba Clean Environment Commission. Manitoba and Climate Change: A Primer. (2001).79 Ibid 80 Natural Resources Canada. From Impacts to Adaptation: Canada in a Changing Climate. (March 2008). Chp 2.

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Natural Resources Canada has developed climate change scenarios for Manitoba related to temperature and precipitation for the years 2020, 2050, and 2080. These figures were derived from climate change research undertaken by 7 global climate models (GCMs) using SRES emission scenarios. Overall, Manitoba is likely to experience increased temperatures and increased precipitation in most seasons; however decreased precipitation in southern Manitoba is predicted for the summer season. Increased temperatures will result in a high rate of evapotranspiration, which will result in a moisture deficit, despite receiving higher amounts of precipitation. Mild winter temperatures also suggest that cold‐weather precipitation may take the form of rain or freezing rain. Northern Manitoba will be particularly vulnerable to climate change, and should expect to experience the greatest amount of change in the province.81 In 2020 Manitoba’s annual mean temperature is expected to increase by 0 to 2˚C, and precipitation could increase from 0 to 10 percent. By 2080, the annual mean temperature is expected to rise from 4 to 6˚C. During this decade, southern Manitoba’s precipitation is estimated to increase by 0 to 10 percent, while northern regions can expect increases between 10 to 20 percent. Extreme northern areas, on the border of Nunavut, and areas around the Hudson Bay could see precipitation increase anywhere from 30 to 40 percent. Seasonal mean temperatures and precipitation changes were also projected for Manitoba for the year 2050. Across the province, higher temperatures and changes in precipitation are predicted to result in wetter, warmer winters and springs, and longer, warmer, and drier summers. In the south, winter temperatures are estimated to increase by 2 to 4˚C with mean precipitation expected to increase by 10 to 20 percent. Average temperatures in the north should increase by 4 to 6˚C, and precipitation in regions near Hudson’s Bay could increase upwards of 30 to 40 percent. Springtime temperatures for most of the province are predicted to increase by 2 to 4˚C, and temperatures in the south central region of the province, including the city of Winnipeg, could experience increased warmth of 4 to 6˚C. Precipitation is expected to increase in most of the province by 10 to 20 percent, while the extreme north could experience changes between 0 and 10 percent. All regions in the province are expected to see increased summer temperatures by around 2 to 4˚C. Precipitation in southern Manitoba could decrease by 0 to 10 percent while central and northern regions could expect increases of around 0 to 10 percent. Areas bordering Nunavut could see precipitation increase of 10 to 20 percent. Lastly, fall temperatures across the province are predicted to rise by 2 to 4˚C, while precipitation could increase from 0 to 10 percent. Northern and areas around the Hudson Bay could experience precipitation increases by 0 to 10 percent.

81 Natural Resources Canada. From Impacts to Adaptation: Canada in a Changing Climate. (March 2008). Chapter 7.

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The Transportation industry is particularly sensitive to climatic changes, and thus these warming and precipitation trends will impact this sector in Manitoba. Infrastructure will become particularly vulnerable as temperatures and precipitation patterns change. It is believed that “increased frequencies of extreme precipitation events and increased inter‐annual climate variability are likely to result in increased damage to roads, railways, and other structures as a result of flooding, erosion and landslides.”82

In some cases, warmer temperatures will decrease the frequency of poor weather conditions associated with colder temperatures. Under mild conditions there will likely be fewer delays and accidents related to transportation due to fewer cold weather systems. Mild temperatures are also likely to decrease the cracking of pavement which is frequently related to cold temperature frost action and freeze‐thaw cycles. In the long term, due to fewer freeze‐thaw cycles, southern roads are less likely to deteriorate and thus require less maintenance and fewer repairs.83 As the temperature and the frequency of extremely hot days rise, permanent paved roads, particularly in the south of the province are likely to become vulnerable to potential infrastructure problems. Road‐related problems may include, “pavement softening and traffic‐related rutting, as well as the migration of liquid asphalt (flushing and bleeding) to pavement surfaces from older or poorly constructed pavements.”84 With proper design and construction, these problems can be mitigated, but at a cost. In the north, where climate change is expected to be the most significant, infrastructure particularly winter roads, will likely be impacted by the warming temperatures. The 2,300 km network of winter roads in northern Manitoba serve as a lifeline to over 38,000 residents in 24 communities that do not have access to permanent roads. Each year approximately 2,500 shipments of essential goods are shipped to these isolated communities from the south. Winter roads in this province are open for an average of 8 to 10 weeks a year, spanning from January to early March.

82Natural Resources Canada. From Impacts to Adaptation: Canada in a Changing Climate. (March 2008). Chapter 7, Page 304.83 Natural Resources Canada. From Impacts to Adaptation: Canada in a Changing Climate. (March 2008).84 Natural Resources Canada. Climate Change Impacts and Adaptation: A Canadian Perspective. (2004). Page 136.

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A study by the Centre for Indigenous Environmental Resources (CIER) through observations conducted by five different First Nation Communities in northern Manitoba, questioned the reliability of winter roads. These First Nation communities noted weakening and thinning of ice, shorter winter road seasons, and increased slush on the roads. As the climate changes, the average length of the winter road season is estimated to decrease by 8 days by the 2020’s, 15 days by the 2050’s, and 21 days by the 2080’s.85 Other northern infrastructure, including airstrips, all‐season roads, and rail operations will also be impacted by climate change. Permafrost, which acts as a structural stabilizer, will likely degrade, and thus reduce its bearing capacity. The Port of Churchill is likely to experience erosion, which will have an impact on shipping infrastructure.86 It is likely that warmer temperatures will allow for a longer ice‐free season in the Hudson’s Bay, and increase marine opportunities in that region. Generally, extreme cold weather impacts railways negatively and causes “broken railways ties, failure of switches and physical stress to the cars,”87 suggesting that warmer temperatures would reduce the costs associated with cold weather‐related maintenance. Increased heat waves in the summer months however, could result in other physical damage, including thermal expansion. Maintenance issues related to railways in the north will increase due to permafrost degradation, and will likely require more frequent repairs, and may eventually require a complete replacement of infrastructure.88

Hybrid Vehicles

Over the past year, Manitoba’s light‐duty vehicle fleet has grown from 348 to 452 vehicles. (See Figure 7.8) Of these 452 vehicles, 421 are E85 flexible fuel vehicles, which is nearly a 34 percent increase from the 2006 fleet. There are also 29 gas electric hybrids, which is a 10 percent decrease from last year’s fleet. The fleet also has two Smart Cars, with one more on order for the 2007 fiscal year. In addition, there are orders for 39 E85 vehicles, and 17 gas electric vehicles for the 2007 fiscal year.

85 Centre for Indigenous Environmental Resources. Climate Change Impacts on ice, winter roads, access trails and Manitoba First Nations. (November 2006). 86 Natural Resources Canada. From Impacts to Adaptation: Canada in a Changing Climate. (March 2008). 87 Natural Resources Canada. From Impacts to Adaptation: Canada in a Changing Climate. (March 2008). Chapter 7, Page 304.88 Natural Resources Canada. From Impacts to Adaptation: Canada in a Changing Climate. (March 2008).

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Figure 7.8: Province of Manitoba’s Alternative Vehicles in Light Duty Fleet, 2007

E8594%

Gas Electric6%

Smart Car0%

As of January 1, 2008 the Province of Manitoba required fuel suppliers to incorporate ethanol into their gasoline. Fuel suppliers will be required to replace a minimum of 8.5 percent of their gasoline available for sale with ethanol by the second quarter of the year. The Province estimates that this initiative will reduce GHG emissions by over 135,000 tonnes.89 According to Manitoba Public Insurance (MPI), as of March 1, 2008, there were 8,401 registered E85 flexible fuel vehicles, 189 Smart Cars, and 1,181 hybrids in Manitoba. There were 567 hybrids sold in the province in 2007.

89 Manitoba Science Technology Energy and Mines. Ethanol Office. <www.gov.mb.ca/stem/energy/ethanol/index.html>

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Glossary

Gross Domestic Product Gross Domestic Product (GDP) by industry at basic prices is a measure of the economic production which takes place within the geographical boundaries of Canada. The term ʺgrossʺ in GDP means that capital consumption costs, that is the costs associated with the depreciation of capital assets (buildings, machinery and equipment), are included. The production estimates are prepared for 215 separate industries using the North American Industrial Classification System (NAICS). Definition Source: <http://www.statcan.ca/cgibin/imdb/p2SV.pl?Function=getSurvey&SDDS=1301&lang=en&db=IMDB&dbg=f&adm=8&dis=2> Employment: Employed persons are those who, during the reference week:

(a) did any work at all at a job or business, that is, paid work in the context of an employer‐employee relationship, or self‐employment. It also includes unpaid family work, which is defined as unpaid work contributing directly to the operation of a farm, business or professional practice owned and operated by a related member of the same household; or

(b) had a job but were not at work due to factors such as own illness or disability, personal or family responsibilities, vacation, labour dispute or other reasons (excluding persons on layoff, between casual jobs, and those with a job to start at a future date).

Definition source: <http://dsp‐psd.pwgsc.gc.ca/collection_2007/statcan/71‐543‐G/71‐543‐GIE2007001.pdf> Paid employment Is work activity excluding housework and volunteer activity. Definition source: <http://dsppsd.pwgsc.gc.ca/collection_2007/statcan/71‐543‐G/71‐543‐GIE2007001.pdf> Unemployment Given the concept of unemployment as the unutilized supply of labour, the operational definition of unemployment is based primarily on the activity of job search and the availability to take a job. In addition to being conceptually appropriate, job search activities can, in a household survey, be objectively and consistently measured over time. The definition of unemployment is therefore the following. Unemployed persons are those who, during reference week:

(a) were on temporary layoff during the reference week with an expectation of recall and were available for work, or

(b) were without work, had actively looked for work in the past four weeks, and were available for work, or

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(c) had a new job to start within four weeks from reference week, and were available for work.

Persons are regarded as available if they reported that they could have worked in the reference week if a suitable job had been offered (or recalled if on temporary layoff); or if the reason they could not take a job was of a temporary nature such as: because of own illness or disability, personal or family responsibilities, because they already have a job to start in the near future, or because of vacation (prior to 1997, those on vacation were not considered available). Full‐time students currently attending school and looking for full‐time work are not considered to be available for work during the reference week. They are assumed to be looking for a summer or co‐op job or permanent job to start sometime in the future, and are therefore not part of the current labour supply. Definition source: <http://dsp‐psd.pwgsc.gc.ca/collection_2007/statcan/71‐543‐G/71‐543‐GIE2007001.pdf> Unemployment Rate Number of unemployed persons expressed as a percentage of the labour force. The unemployment rate for a particular group (for example, age, sex, marital status) is the number unemployed in that group expressed as a percentage of the labour force for that group. Definition source: <http://dsp‐psd.pwgsc.gc.ca/collection_2007/statcan/71‐543‐G/71‐543‐GIE2007001.pdf> Labour income Labour income comprises wages and salaries and supplementary labour income. It is defined as all compensation paid to employees. Earnings received by self‐employed persons or working owners of unincorporated businesses are not included in labour income. In addition to regular remuneration, it includes directorsʹ fees, bonuses, commissions, gratuities, income in kind, taxable allowances, retroactive wage payments and stock options. Wages and salaries are estimated on a ʺgrossʺ basis, that is, prior to deductions for employeesʹ contributions to income tax, employment insurance, pension funds etc. Supplementary labour income, which is defined as payments made by employers for the future benefit of their employees, comprises employer contributions to employee welfare, pensions, workers compensation and employment insurance. Definition Source: <http://www.statcan.ca/cgi‐in/imdb/p2SV.pl?Function=getSurvey&SDDS=2602&lang=en&db=IMDB&dbg=f&adm=8&dis=2> Direct economic activity Is the direct employment, employment income, and expenditures and contribution to provincial gross domestic product for a sector. Indirect economic activity Is the additional economic activity that occur in firms that supply inputs to the direct sector.

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Induced economic activity Is the trickle down affects of the expenditures by both the direct and related indirect sector as they multiply through other sectors of the economy. These are largely driven by consumption spending. Leverage Is the sum of the indirect and induced activities. For Hire Trucking: Any carrier that transport of goods for compensation. Definition Source: <http://dsppsd.pwgsc.gc.ca/Collection‐R/Statcan/53‐222‐XIB/0000453‐222‐XIE.pdf> Rail Traditionally rail data was classified under Class I and Class 2 railways. Since 1997 data has been classified using the NAICS system. Rail Transportation falls under NAICS subsector 482, which is classified as follows:

Short‐Haul Freight Rail Transportation (482112) Mainline Freight Rail Transportation (482113) Passenger Rail Transportation (482114)

Definition Source: <http://dsp‐psd.pwgsc.gc.ca/Collection‐R/Statcan/52‐216‐XIB/52‐216‐XIE2005000.pdf> Aviation Is based on Level I to III air carriers. The classification of carriers used by Statistics Canada is as follows:

Level I. This includes every Canadian air carrier not classified in report level VI that, in each of the two calendar years immediately preceding the report year, transported at least 1,000,000 revenue passengers or at least 200,000 tonnes of revenue goods.

Level II. This includes every Canadian air carrier not classified in report level VI

that, in each of the two calendar years immediately preceding the report year, transported 100,000 revenue passengers or more, but fewer than 1,000,000 revenue passengers, or 30000 tonnes of revenue goods or more but less than 200 000 tonnes of revenue goods.

Level III. This includes every Canadian air carrier not classified in report level VI

that, in each of the two calendar years immediately preceding the report year, realized annual gross revenues of $1,000,000 or more for the air services for which the air carrier held a licence.

Level IV. Not applicable.

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Level V. This includes every Canadian air carrier not classified in report level I, II, III

or VI that, in each of the two calendar years immediately preceding the report year, realized annual gross revenues of less than $1,000,000 for the air services for which the air carrier held a licence.

Level VI. Every Canadian air carrier that, in the report year, operated the air service

for which the air carrier holds a licence for the sole purpose of serving the needs of a lodge operation.

Definition Source: <http://dsp‐psd.pwgsc.gc.ca/Collection‐R/Statcan/51‐203‐XIB/51‐203‐XIE2005000.pdf> Couriers and Local Messengers The courier industry group comprises establishments primarily engaged in providing air, surface or combined courier delivery services. Courier establishments of the Post Office are included. The local messenger industry group comprises establishments primarily engaged in providing messenger and delivery services of small parcels within a single urban area. Establishments engaged in the delivery of letters and documents, such as legal documents, often by bicycle or on foot; and the delivery of small parcels, such as take‐out restaurant meals, alcoholic beverages and groceries, on a fee basis, usually by small truck or van, are included. Definition Source: <http://dsp‐psd.pwgsc.gc.ca/Collection‐R/Statcan/50‐002‐XIB/50‐002‐XIE2006003.pdf> Urban and Interurban Bus Includes public transit from the Canadian Urban Transit Association and an estimate of interurban buses based on historical Statistics Canada data. Interurban includes intercity, school, charter, sightseeing and other buses. Leading indicators The Canadian Composite Leading Indicator is comprised of ten components which lead cyclical activity in the economy and together represent all major categories of Gross Domestic Product (GDP). It thus reflects the variety of mechanisms that can cause business cycles. Definition source: <http://www.statcan.ca/cgi‐bin/imdb/p2SV.pl?Function=getSurvey&SDDS=1601&lang=en&db=IMDB&dbg=f&adm=8&dis=2.>

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List of Figures

Figure 1.1: Per Capita Direct GDP from Transportation and Warehousing by Region ..... 1 Figure 1.2: Ratio of Per Capita Contribution from Transportation and Warehousing to Direct GDP: Western Canada Compared to Eastern............................................................... 2 Figure 1.3: Per Capita Direct GDP from Transportation and Warehousing by Province Western Canada............................................................................................................................ 3 Figure 1.4: Transportation and Warehousing Direct Contribution to GDP by Region: 2006................................................................................................................................................. 3 Figure 1.5: Transportation and Warehousing Contribution to Direct GDP by Region: 2006................................................................................................................................................. 4 Figure 1.6: Direct Employment in Transportation and Warehousing per 1,000 Population by Region ....................................................................................................................................... 5 Figure 1.7: Ratio of Per Capita Direct Transportation and Warehousing Employment: Western Canada Compared to Eastern Canada....................................................................... 6 Figure 1.8: Direct Employment in Transportation and Warehousing per 1,000 Population by Province: Western Canada..................................................................................................... 6 Figure 1.9: Transportation and Warehousing Contribution to Direct Employment by Region: 2006 .................................................................................................................................. 7 Figure 1.10: Direct Labour Income from Transportation and Warehousing per Capita by Region: 2006 .................................................................................................................................. 8 Figure 1.11: Ratio of Direct Per Capita Income Contribution from Transportation and Warehousing to GDP: Western Canada Compared to Eastern Canada............................... 9 Figure 1.12: Direct Labour Income from Transportation and Warehousing per Capita Province: Western Canada .......................................................................................................... 9 Figure 1.13: Transportation and Warehousing Direct Contribution to Labour Income by Region: 2006 ................................................................................................................................ 10 Figure 1.14: Direct GDP of Sectors of the Manitoba Economy: 2006................................... 11 Figure 1.15: Direct GDP Level Transportation and Warehousing: Manitoba.................... 11 Figure 1.16: Trend in Share of Manitoba Direct GDP from Transportation and Warehousing ............................................................................................................................... 12 Figure 1.17: Direct Paid Employment by Sector of the Manitoba Economy: 2006 ............ 13 Figure 1.18: Trend in Transportation and Warehousing’s Direct Total Employment.... 14 Figure 1.19: Trend in Share of Manitoba Direct Paid Employment From Transportation and Warehousing ....................................................................................................................... 14 Figure 1.20: Direct Total Labour Income by Sector of the Manitoba Economy: 2006 ....... 15 Figure 1.21: Direct Labour Income Level Transportation and Warehousing: Manitoba . 15 Figure 1.22: Trend in Share of Manitoba Labour Income From Transportation and Warehousing ............................................................................................................................... 16 Figure 2.1: Trend in Total GDP by the Transportation in Sector in Manitoba................... 19 Figure 2.2: Trend in Total GDP by Leverage (Multiplier) Component Generated by the Transportation in Manitoba ...................................................................................................... 20

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Figure 2.3: Trend in Total Employment Generated by the Transportation Sector in Manitoba ...................................................................................................................................... 21 Figure 2.4: Trend in Total Employment Generated By Trucking In Manitoba.................. 21 Figure 2.5: Trend in Total Employment Generated by Aviation, Couriers, Rail and Bus in Manitoba ...................................................................................................................................... 22 Figure 2.6: Trend in Employment by Leverage (Multiplier) Component Generated by the Transportation Sector in Manitoba .......................................................................................... 23 Figure 2.7: Trend in Total Labour Income Generated by the Transportation Sector in Manitoba ...................................................................................................................................... 23 Figure 2.8: Trend in Labour Income by Leverage (Multiplier) Component Generated by the Transportation Sector in Manitoba.................................................................................... 24 Figure 2.9: Total GDP Generated by Transportation Mode: 2006 ....................................... 25 Figure 2.10: Change in Total Contribution to Manitoba GDP by Transportation Mode 25 Figure 2.11: Leverage (Multiplier) Ratios for Manitoba Total GDP by Transportation Mode............................................................................................................................................. 26 Figure 2.12: Total Employment Generated by Transportation Mode: 2006 ....................... 27 Figure 2.13: Change in Total Employment Generated by Transportation Mode.............. 27 Figure 2.14: Leverage (Multiplier) Ratios for Manitoba Employment by Transportation Mode............................................................................................................................................. 28 Figure 2.15: Total Labour Income Generated by Transportation Mode: 2006 ................... 28 Figure 2.16: Change in Total Labour Income Generated by Transportation Mode .......... 29 Figure 2.17: Leverage (Multiplier) Ratios for Manitoba Labour Income by Transportation Mode............................................................................................................................................. 29 Figure 3.1: Gross Domestic Product (Canada/Manitoba) ..................................................... 33 Figure 3.2: Rate of Change in GDP (Canada/Manitoba) ....................................................... 34 Figure 3.3: Labour Income (Canada/Manitoba) ..................................................................... 35 Figure 3.4: Rate of Change in Labour Income (Canada/Manitoba)..................................... 36 Figure 3.5: Consumer Price Index (Canada/Manitoba)......................................................... 37 Figure 3.6: Rate of Change in CPI (Canada/Manitoba) ......................................................... 38 Figure 3.7: Personal Expenditures (Canada/Manitoba) ........................................................ 39 Figure 3.8: Rate of Change in Personal Expenditures (Canada/Manitoba)........................ 40 Figure 3.9: Housing Starts (Canada/Manitoba)...................................................................... 41 Figure 3.10: Rate of Change in Housing Starts (Canada/Manitoba) ................................... 42 Figure 3.11: Unemployment Rate (Canada/Manitoba) ......................................................... 43 Figure 3.12: Change in Unemployment Rate (Canada/Manitoba) ...................................... 44 Figure 3.13: Quarterly Average Exchange Rates – U.S. Dollar ............................................ 45 Figure 3.14: Quarterly Average Interest Rates (Bank of Canada Rate)............................... 47 Figure 3.15: Quarterly Average S&P/TSX Composite Index................................................ 48 Figure 3.16: Quarterly Average Composite Index of Leading Indicators (Canada) ......... 49 Figure 3.17: Average Annual Composite Leading Indicator – Canada to Traditional “Developed” Economies............................................................................................................ 50 Figure 3.18: Average Annual Composite Leading Indicator – Canada to Emerging International Economies............................................................................................................ 51

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Figure 3.19: Quarterly Average Price Oil/Barrel ($US) ......................................................... 52 Figure 3.20: Quarterly Average Unleaded Fuel Prices (Winnipeg Region) ....................... 53 Figure 3.21: Quarterly Average Diesel Fuel Prices (Winnipeg Region).............................. 54 Figure 4.1: Rate of Change, Canada to Traditional “Developed” Economies ................... 55 Figure 4.2: Canada and Traditional International Economies GDP.................................... 56 Figure 4.3: Rate of Change, Canadian Exports & Imports To/From European Union‐ Value............................................................................................................................................. 59 Figure 4.4: Province of Origin, Canadian Exports to European Union‐ Value.................. 60 Figure 4.5: Region of Origin, 2000‐2006 Canadian Exports to European Union‐ Value... 60 Figure 4.6: Rate of Change, Canadian Exports & Imports To/From European Union‐ Value............................................................................................................................................. 61 Figure 4.7: Province of Origin, Canadian Exports to European Union‐ Weight ............... 62 Figure 4.8: Region of Origin, 2000‐2006 Canadian Exports to European Union‐ Weight 62 Figure 4.9: Rate of Change, Canadian Exports & Imports To/From Japan‐ Value............ 63 Figure 4.10: Province of Origin, Canadian Exports to Japan‐ Value ................................... 64 Figure 4.11: Region of Origin, 2000‐2006 Canadian Exports to Japan‐ Value.................... 65 Figure 4.12: Rate of Change, Canadian Exports & Imports To/From Japan‐ Weight ....... 65 Figure 4.13: Province of Origin, Canadian Exports to Japan‐ Weight ................................ 66 Figure 4.14: Region of Origin, 2000‐2006 Canadian Exports to Japan‐ Weight ................. 67 Figure 4.15: Rate of Change, Canadian Exports & Imports To/From United Kingdom‐ Value............................................................................................................................................. 68 Figure 4.16: Province of Origin, Canadian Exports to United Kingdom‐ Value ............... 69 Figure 4.17: Region of Origin, 2000‐2006 Canadian Exports to United Kingdom‐ Value 69 Figure 4.18: Rate of Change, Canadian Exports & Imports To/From United Kingdom‐ Weight .......................................................................................................................................... 70 Figure 4.19: Province of Origin, Canadian Exports to United Kingdom‐ Weight............. 71 Figure 4.20: Region of Origin, 2000‐2006 Canadian Exports to United Kingdom‐ Weight....................................................................................................................................................... 71 Figure 4.21: Rate of Change, Canadian Exports & Imports To/From United States‐ Value....................................................................................................................................................... 72 Figure 4.22: Province of Origin, Canadian Exports to United States‐ Value...................... 73 Figure 4.23: Region of Origin, 2000‐2006 Canadian Exports to United States‐ Value ...... 74 Figure 4.24: Rate of Change, Canadian Exports & Imports To/From United States‐ Weight .......................................................................................................................................... 75 Figure 4.25: Province of Origin, Canadian Exports to the United States‐ Weight ............ 76 Figure 4.26: Region of Origin, 2000‐2006 Canadian Exports to United States‐ Weight.... 76 Figure 4.27: Rate of Change, Canada to Emerging International Economies .................... 77 Figure 4.28: Canada and Emerging International Economies GDP .................................... 78 Figure 4.29: Rate of Change, Canadian Exports & Imports To/From Brazil‐ Value ......... 79 Figure 4.30: Province of Origin, Canadian Exports to Brazil‐ Value................................... 80 Figure 4.31: Region of Origin, 2000‐2006 Canadian Exports to Brazil‐ Value.................... 81 Figure 4.32: Rate of Change, Canadian Exports & Imports To/From Brazil‐ Weight....... 81 Figure 4.33: Province of Origin, Canadian Exports to Brazil‐ Weight ................................ 82

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Figure 4.34: Region of Origin, 2000‐2006 Canadian Exports to Brazil‐ Weight ................. 82 Figure 4.35: Rate of Change, Canadian Exports & Imports To/From China‐ Value ......... 83 Figure 4.36: Province of Origin, Canadian Exports to China‐ Value .................................. 84 Figure 4.37: Region of Origin, 2000‐2006 Canadian Exports to China‐ Value ................... 85 Figure 4.38: Rate of Change, Canadian Exports & Imports To/From China‐ Weight....... 85 Figure 4.39: Province of Origin, Canadian Exports to China‐ Weight................................ 86 Figure 4.40: Region of Origin, 2000‐2006 Canadian Exports to China‐ Weight................. 87 Figure 4.41: Rate of Change, Canadian Exports & Imports To/From India‐ Value........... 88 Figure 4.42: Province of Origin, Canadian Exports to India‐ Value.................................... 89 Figure 4.43: Region of Origin, 2000‐2006 Canadian Exports to India‐ Value..................... 89 Figure 4.44: Rate of Change, Canadian Exports & Imports To/From India‐ Weight ........ 90 Figure 4.45: Province of Origin, Canadian Exports to India‐ Weight ................................. 91 Figure 4.46: Region of Origin, 2000‐2006 Canadian Exports to India‐ Weight .................. 91 Figure 4.47: Rate of Change, Canadian Exports & Imports To/From Mexico‐ Value....... 92 Figure 4.48: Province of Origin, Canadian Exports to Mexico‐ Value ................................ 93 Figure 4.49: Region of Origin, 2000‐2006 Canadian Exports to Mexico‐ Value ................. 93 Figure 4.50: Rate of Change, Canadian Exports & Imports To/From Mexico‐ Weight .... 94 Figure 4.51: Province of Origin, Canadian Exports to Mexico‐ Weight.............................. 95 Figure 4.52: Region of Origin, 2000‐2006 Canadian Exports to Mexico‐ Weight............... 95 Figure 4.53: Rate of Change, Canadian Exports & Imports To/From Russia‐ Value ........ 96 Figure 4.54: Province of Origin, Canadian Exports to Russia‐ Value ................................. 97 Figure 4.55: Region of Origin, 2000‐2006 Canadian Exports to Russia‐ Value .................. 97 Figure 4.56: Rate of Change, Canadian Exports & Imports To/From Russia‐ Weight...... 98 Figure 4.57: Province of Origin, Canadian Exports to Russia‐ Weight ............................... 99 Figure 4.58: Region of Origin, 2000‐2006 Canadian Exports to Russia‐ Weight................ 99 Figure 4.59: Rate of Change, Canadian Exports & Imports To/From South Korea‐ Value..................................................................................................................................................... 100 Figure 4.60: Province of Origin, Canadian Exports to South Korea‐ Value ..................... 101 Figure 4.61: Region of Origin, 2000‐2006 Canadian Exports To South Korea‐ Value..... 101 Figure 4.62: Rate of Change, Canadian Exports & Imports To/From South Korea‐ Weight..................................................................................................................................................... 102 Figure 4.63: Province of Origin, Canadian Exports to South Korea‐ Weight................... 103 Figure 4.64: Region of Origin, 2000‐2006 Canadian Exports To South Korea‐ Weight .. 103 Figure 4.65: 2006 Canadian Imports by Mode...................................................................... 108 Figure 4.66: 2006 Canadian Exports by Mode ...................................................................... 110 Figure 4.67: Rate of Change in Canadian Import Traffic by Value ................................... 112 Figure 4.68: Rate of Change in Canadian Import Traffic by Value (Without Pipeline & Energy)....................................................................................................................................... 113 Figure 4.69: Modal Distribution, 2000‐2006 Canadian Import Traffic by Value ............. 113 Figure 4.70: Rate of Change in Canadian Import Traffic by Weight................................. 114 Figure 4.71: Modal Distribution, 2000‐2006 Canadian Import Traffic by Weight ........... 115 Figure 4.72: Rate of Change in Canadian Export Traffic by Value.................................... 116 Figure 4.73: Modal Distribution, 2000‐2006 Canadian Export Traffic by Value.............. 116

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Figure 4.74: Rate of Change in Canadian Export Traffic by Weight ................................. 117 Figure 4.75: Modal Distribution, 2000‐2006 Canadian Export Traffic by Weight ........... 118 Figure 5.1: 2006 Manitoba’s Top Countries of Export (by Value)...................................... 125 Figure 5.2: 2006 Manitoba’s Top Countries of Export (by Weight) ................................... 127 Figure 5.3: 2006 Manitoba’s Mode of Exports (by Value) ................................................... 127 Figure 5.4: 2006 Manitoba’s Mode of Exports (by Weight) ................................................ 128 Figure 5.5: 2006 Mode of Imports Clearing Via Manitoba (by Value) .............................. 130 Figure 5.6: 2006 Mode of Imports Clearing Via Manitoba (by Weight)............................ 131 Figure 5.7: Pct of Provinces’ Exports Leaving CDA From Originating Prov. (by Value)133 Figure 5.8: Pct of Provinces’ Exports Leaving CDA From Originating Prov. (by Weight)..................................................................................................................................................... 134 Figure 5.9: Pct of Provinces’ Exports Leaving CDA From Originating Prov. (by Value)135 Figure 5.10: Pct of Provinces’ Exports Leaving CDA From Originating Prov. (by Weight)..................................................................................................................................................... 135 Figure 5.11: Pct of Provinces’ Exports Leaving CDA From Originating Prov. (by Value)..................................................................................................................................................... 136 Figure 5.12: Pct of Provinces’ Exports Leaving CDA From Originating Prov. (by Weight)..................................................................................................................................................... 136 Figure 5.13: Pct of Provinces’ Exports Leaving CDA From Originating Prov. (by Value)..................................................................................................................................................... 137 Figure 5.14: Pct of Provinces’ Exports Leaving CDA From Originating Prov. (by Weight)..................................................................................................................................................... 137 Figure 5.15: 2006 Provincial Exports Leaving Via Manitoba (by Value) .......................... 138 Figure 5.16: 2006 Provincial Exports Leaving Via Manitoba (by Value) .......................... 139 Figure 5.17: 2006 Provincial Exports Leaving Via MB (by Weight) .................................. 139 Figure 5.18: 2006 Mode of Exports Leaving Via MB (by Weight)...................................... 140 Figure 5.19: 2006 Prairie Provinces’ Export Trucking Weight Surplus/Deficit................ 141 Figure 5.20: 2006 Prairie Provinces’ Export Rail Weight Surplus/Deficit ......................... 145 Figure 5.21: Rail Traffic Flows In/Through Manitoba, 2001‐2005 (by Weight)................ 146 Figure 5.22: Rail Traffic Flows In/Through Saskatchewan, 2001‐2005 (by Weight)........ 147 Figure 5.23: Rail Traffic Flows In/Through Alberta, 2001‐2005 (by Weight) ................... 148 Figure 5.24: Rail Traffic Flows In/Through Ontario, 2001‐ 2005 (by Weight) .................. 148 Figure 5.25: Rail Traffic Flows In/Through Manitoba, by Originating Province, 2005 (by Weight)....................................................................................................................................... 150 Figure 5.26: Westbound Rail Traffic Flowing Through Manitoba, Destined for SK, AB, BC, 2001‐2005 (by Weight) ...................................................................................................... 151 Figure 5.27: Eastbound Rail Traffic Flowing Through Manitoba, Destined for ATL, QUE, ON, 2001‐2005 (by Weight) ..................................................................................................... 152 Figure 5.28: Truck Traffic Flows in/through Manitoba 2004‐2005 (by Weight)............... 153 Figure 5.29: Truck Traffic Flows in/through Saskatchewan, 2004‐2005 (by Weight)...... 154 Figure 5.30: Truck Traffic Flows in/through Alberta, 2004‐2005 (by Weight) ................. 154 Figure 5.31: Truck Traffic Flows in/through Ontario, 2004‐2005 (by Weight) ................. 155

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Figure 5.32: Truck Traffic Flows in/through Manitoba, by Originating Province, 2005 (by Weight)....................................................................................................................................... 156 Figure 5.33: Westbound Truck Traffic Flowing Through Manitoba, Destined for SK, AB, BC, 2001‐2005 (by Weight) ...................................................................................................... 157 Figure 5.34: Eastbound Truck Traffic Flowing Through Manitoba, Destined for ATL, QUE, ON, 2001‐2005 (by Weight)........................................................................................... 158 Figure 5.35: Manitoba Exports to US Corridor States, by Rail ........................................... 159 Figure 5.36: Distribution of Manitoba Exports to US Corridor States, by Rail ................ 160 Figure 5.37: Manitoba Exports to US Corridor States, by Rail ........................................... 161 Figure 5.38: Distribution of Manitoba Exports to US Corridor States, by Rail ................ 162 Figure 5.39: Manitoba Exports to US Corridor States, by Road......................................... 163 Figure 5.40: Distribution of Manitoba Exports to US Corridor States, by Road.............. 164 Figure 5.41: Manitoba Exports to US Corridor States, by Road......................................... 165 Figure 5.42: Distribution of Manitoba Exports to US Corridor States, by Road.............. 166 Figure 5.43: Manitoba Imports from US Corridor States, by Rail...................................... 167 Figure 5.44: Distribution of Manitoba Imports from US Corridor States, by Rail........... 168 Figure 5.45: Manitoba Imports from US Corridor States, by Rail...................................... 169 Figure 5.46: Distribution of Manitoba Imports from US Corridor States, by Rail........... 170 Figure 5.47: Manitoba Imports from US Corridor States, by Road ................................... 171 Figure 5.48: Distribution of Manitoba Imports from US Corridor States, by Road ........ 172 Figure 5.49: Manitoba Imports from US Corridor States, by Road ................................... 173 Figure 5.50: Distribution of Manitoba Imports from US Corridor States, by Road ........ 174 Figure 6.1: Federal Transportation Surplus/Deficit, 1987/88 to 2010/11 ........................... 175 Figure 6.2: Relative Spending by Transport Canada and Other Federal Departments, 1987/88 to 2010/11 ..................................................................................................................... 176 Figure 6.3: Total Federal Transportation Revenues, 1987/88 to 2010/11........................... 177 Figure 7.1: Per Capital International GHG Emissions (Mt CO2 eq), 1990, 1995, 2000, 2005..................................................................................................................................................... 179 Figure 7.2: Per Capita International GHG Emissions from the Transportation Sector (Mt CO2 eq), 1990, 1995, 2000, 2005................................................................................................ 181 Figure 7.3: Total GHG Emissions in Canada and Manitoba by Sector (Mt CO2 eq.), 2005..................................................................................................................................................... 182 Figure 7.4: Canada GHG Emission by Mode (Mt CO2 eq.), 1990 and 2005 ...................... 183 Figure 7.5: Canada GHG Emissions by Road Transportation (Mt CO2 eq.), 1990 and 2005..................................................................................................................................................... 183 Figure 7.6: Manitoba GHG Emissions by Mode (Mt CO2 eq.), 1990 and 2005 ............... 184 Figure 7.7: Manitoba GHG Emissions by Road Transportation (Mt CO2 eq.), 1990 and 2005............................................................................................................................................. 185 Figure 7.8: Province of Manitoba’s Alternative Vehicles in Light Duty Fleet, 2007........ 189

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List of Tables

Table 4.1: 2006 European Union Members, Canadian Trade Data...................................... 58 Table 4.2: Canadian Exports‐ Top 10 Countries by Value .................................................. 104 Table 4.3: Canadian Exports‐ Top 10 Countries by Weight (kg)........................................ 105 Table 4.4: Canadian Imports‐ Top 10 Countries by Value.................................................. 106 Table 4.5: Canadian Imports‐ Top 10 Countries by Weight (kg) ....................................... 107 Table 5.1: 2006 Manitoba Top 10 Exports (HS06) (by Value) ............................................. 124 Table 5.2: 2006 Manitoba Top 10 Countries of Export Destination (by Value)................ 126 Table 5.3: 2006 Manitoba Top 10 Countries of Export Destination (by Value)................ 126 Table 5.4: 2006 Manitoba Top 10 Imports (HS02) (by Value) ............................................. 129 Table 5.5: 2006 Top 10 Imports by Countries Clearing Imports Through Manitoba (by Value) ......................................................................................................................................... 130 Table 5.6: 2006 Road Exports of Key Provinces.................................................................... 142 Table 5.7: 2006 Exports Leaving Canada by Province of Exit ............................................ 143 Table 5.8: Rail Traffic Flows Through Canadian Provinces, 2005 ..................................... 149 Table 5.9: Truck Traffic Flows Through Canadian Provinces, 2005 .................................. 156

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